Driving the ROI – where to start your projects metrics?

The most compelling metrics focuses on the business impact of an ERG rather than on ‘measuring the ERG’. Here are the rationale and a generic approach to deriving meaningful and business-relevant metrics for ERG projects.

Driving the ROI – where to start your projects metrics?

So you have started your ERG and done your homework on what the business strategy of your organization is. You also found areas of need in your organization that you want to address with some serious projects. – But where to start building a project metrics? What is important, what makes sense and is meaningful?

Establishing metrics can be stressful and confusing. What metrics persuade your stakeholders? Less is often more, so focus on just a few parameters that are to the point rather than drowning in a myriad of complicated and detailed measurements that will quickly suck your precious time and bore your audience to death.

In general, your project metrics can reflect the ERG or focus on the business results that the ERG achieves – I opt for emphasizing the latter.

ERG focused metrics

Let’s look at the ERG focused metrics first. It seems the traditional approach for most ERGs that may have evolved from affinity and network groups: The basic idea in establishing this kind of metrics is to help justify the ERG by demonstrating its growth and maturity over time. The typical metrics are, for example, the number of active and passive members, the participants in meetings, how many new faces (=potential recruits) show up and how many of them signed up as members, etc. These figures are helpful to explain that there is an interest in the ERG, what happened to funds (often spent on catering) or if the organization met demographic goals of diversity, for example.

However, if you measure along these lines alone you may miss out on leveraging your ERG to get recognized and valued as a credible business resource to the organization.

Business-focused Metrics

Question for you: which message does an executive find more compelling? “The ERG has 300 members and meets monthly for two hours.” or “The ERG contributed to $260 million in sales last year.”

Now, this kind of metrics takes a different approach, doesn’t it? It aims at driving business results, the famous return-on-investment (ROI), the ‘bottom-line’. It easily grasps a stakeholder’s attention because it demonstrates a significant and direct value proposition for the company.

By the way, the above example is real! According to DiversityInc.com, Ford Motor Co. directly linked the sales of $260m in one year to an initiative of its InterFaith ERG!
– Look it up yourself if you like: http://www.diversityinc.com/cgi-bin/cms/article.cgi?mode=printable&id=284

Not all goals are high rolling and they also depend on the business you are in. The spectrum of possible success metrics is broad and ranges from obvious business goals such as increasing revenue, profit, market share, quality, speed and customer satisfaction to –perhaps‑ less obvious ones such as increasing employee satisfaction, intellectual property created, employee acquisition and retention or reducing turnover, waste or business risks, just to give some examples.

How to get started

For many ERG leaders, the most difficult question is how to establish a metrics when the targets appear fuzzy and are not as easy to grasp as a sales figure that was either met or not.

To find your bearings, try this: Relax. Breathe deeply. Then take a step back and use your imagination… Envision a picture of what the results look like when the project completed successfully. What do you see when you have reached the goal, what are the visible and tangible results, what has changed?

Now describe this envisioned picture in words in a demonstrative way using clear and unambiguous terms such as “By September 1st I want to be able to touch X and use to do Y with Z!”

This provides you with a great starting point to refine more specific requirements and also leads quite naturally to meaningful metrics in a simple but effective way such as the tangible deliverable (X), the target time until completion, some required feature (Y) and some input (Z) requirements in the example.

“What’s in it for me?” (WIIFM)

ERGs rely on active membership to succeed while the ERG in return can also provide the symbiotic grounds for personal and professional development and careers of its members.

“What’s in it for me?” (WIIFM)

What every new employee resource group (ERG) requires most are people: the life-blood for ideas and activities!  But how do you reach out to employees, help them understand the value of the ERG and get them involved to engage actively?

Communicating the benefits they have from joining and becoming an active member. Give them solid answers to their question: “What’s in it for me?” (WIIFM).

From my experience, there are people in every organization that actively seek an opportunity to challenge and prove themselves, who want to develop new or apply acquired skills, make a significant difference even outside their immediate job requirements, impact the business results, going the ‘extra-mile’ and being recognized for it.

Take a look at the volunteers, the activists, the silent experts, the social connectors around you that show positive ‘organizational citizenship behavior’ within your organization. What are they interested in, what troubles them, what makes them ‘tick’? What opportunities does your ERG provide for them?

Now, ERGs may offer different benefits to its members. In general, fulfilling motivators can include:

  • Exposure to other business areas and insight to departments outside their day-job
  • Doing meaningful, interesting and business-relevant work
  • Solving a problem that many people share
  • Making a difference – directly, here and now
  • Personal growth and professional experience and development opportunities
  • Developing skills such as presentation, organization, negotiation, etc.
  • Meeting like-minded people to connect and network with
  • Visibility to management, leaders, and decision-makers within the company and possibly also outside the company
  • Receiving appreciation and recognition for achievements
  • Aiming for new career opportunities.

Find the driver and aim to form a symbiosis between member and ERG to the better of the organization, the individual member and the ERG.

A business focused ERG may even serve as a real-life ‘leadership development pipeline’ for the company where more experienced members support and coach the less experienced ones to reach a shared goal. This way an ambitious ERG member can gain hands-on experience in relevant business projects, lead increasingly larger projects and take on more responsibility over time while establishing a credible and professional track-record for themselves.

Now, those are achievements an employee can proudly point out in their next job interview, while the company and the ERG benefits from unleashing the employees full potential!

The blind side of HR? –or- A case for talent retention!

Discussion of the provocative thesis that HR strategists are blind-sided and focus on talent acquisition rather than on talent retention. This opens opportunities for ERGs to fill the gap by engaging the present employees and running projects targeting talent retention for the organization!

The blind side of HR? –or-  A case for talent retention!

Ask whom you want, the corporate “war over talent” is declared and raging out there worldwide. We see companies going above and beyond to spot the precious future brainpower, lure them with all the goodies and reel in the catch – but what happens later?

After the first days of sweet honeymoon with ‘new hire orientations’, fancy status symbols and back-patting, the shiny brochures start wilting, the warm words of welcoming encouragement fade and reality kicks in – and sometimes hard.

Now, did you notice that HR strategies these days tend to focus on talent acquisition but neglect employee engagement to secure talent retention?

It’s not enough to bring in the ‘top talent’ when you can’t get the most out of your staff effectively and consistently long-term. To drive innovation and game-changing business models to their full potential, we cannot relinquish the expertise and insight of people familiar with the company or flourish on ideas from newly hired staff alone.

When true ‘on-boarding’ fails (and what I mean by that is embedding the new employee firmly into the organization’s human fabric) the wedding is short-lived. Good people are easy to move again to find their next job somewhere else and leaving the company behind with an unproductive vacant position. New employees may also soon pick up on limiting or meager career prospects that they soon will share with their not-so-new-anymore co-workers that were not granted the opportunity to develop and ‘grow’ into the open position. Then, the costly investment in the new hire went down the drain while the company still needs to fill the vacant position with another candidate to be snatched from the competition at a cost…

On the other hand, what is the effect on the more seasoned employees that ever hiring new staff has over the transfer and development seasoned staff? They see the influx of fresh blood affecting (and sometimes disrupting) the established company’s culture as well as limiting their own career opportunities. When will the veteran staff feel they are no longer valued and find it is time to make a move and be courted by a new employer that values their talent more?

How about this provocative thesis:   HR strategists –by the very nature of their job!- see the organization as it should be in contrast to the functional managers throughout the organization see it as it is in the reality they have to deal with every day. Therefore, HR strategists are naturally blind-sided!

Does the HR strategic perspective make sense to focus on acquisition, i.e. hire talent the company should have, and not so much on retention, i.e. the talent the company already has?
– I leave this question open for discussion. What are your observations or experiences?

If this thesis holds true then ERG leaders face opportunity and, perhaps, have an obligation to show positive “organizational citizenship behavior” by doing what is right for the organization. Focusing on ERG engagement projects that aim at employee engagement and talent retention then has a bright future!

How to approach ‘metrics’?

There is confusion around why, what and how to measure. Resistance to measuring also seem to originate from a too narrow interpretation of the term ‘measuring’, a fuzzy approach and a lack of creativity on how to measure what. Douglas W. Hubbard offers guidance by asking powerful questions.

How to approach ‘metrics’?

There is much truth in the saying that comes in many variations: “What gets measured gets managed”, “Everything that can be measured can also be managed” or even “What isn’t measured can’t be managed”. ‑ If you don’t measure progress or success, how would you know you reached the goal?

Now, there is much confusion around why, what and how to measure as well as resistance to measuring that seem to originate from a

  • too narrow interpretation of the term ‘measuring’
  • fuzzy approach
  • lack of creativity on how to measure what.

Some people associate ‘measuring’ with lab coats, values with many digits behind the decimal point or requiring complicated formulas and ways to produce valid results. This –typically- does not reflect reality nor is complexity always necessary.

There also seems misconception that measuring has to eliminate any error and that there simply is no metrics possible for less tangible problems like ‘employee engagement’, ‘employee satisfaction’ or ‘strategic alignment’ just to name a few.

It becomes much easier if you understand measuring as a means to reduce uncertainty. When stakes to fail are high in an environment with much uncertainty, then reducing uncertainty is worthwhile, as it reduces risk and provides a quantifiable value. Even a very simple metrics can often help to answer the critical question.

When it comes to how to a systematic approach to measuring, here are some guiding questions that I found in a book of Douglas W. Hubbard; find specific answers before you measure:

  1. What is the decision this is supposed to support?
  2. What really is the thing being measured?
  3. Why does this thing matter to the decision being asked?
  4. What do you know about it?
  5. What is the value to measure it further?

(Source: “How to Measure Anything – finding the value of intangibles in business” (p.43) by Douglas W. Hubbard; www.howtomeasureanything.com)

If you take a sharp look around, you may find that many things are being measured without adding any benefit. For example: no decisions being made based on a measurement, such as a periodic report or detailed survey results.

Other things aren’t measured but should. For example: what business value does an ERG add to a company?

Q&A – Case study for founding a business-focused ERG

Answers to questions around establishing the NxGen ERG at Boehringer Ingelheim Pharmaceuticals, Inc. in 2009

If you are planning to found an ERG or are a new ERG Leaders, you might find the attached Q&A helpful.

In an interview style, here are the answers to the following questions around establishing the NxGen ERG (Next Generation at the Workplace) at Boehringer Ingelheim (BI) in 2009:

  • Where did the idea for NxGen originate?
  • Why was the Next Generation at the Workplace ERG necessary at BI?
  • What makes NxGen innovative? How do you think your approach to creating and growing this new ERG was different from the past?
  • What is the business case for the existence of NxGen? How do you link NxGen to BI business plans/activities?
  • How does the NxGen seek to drive innovation at BI?
  • Are there specific requirements for project size, scope, etc that the NxGen group takes on?
  • How are employees able to allocate time to create and develop NxGen projects?
  • Do the initiatives that arise out of NxGen resonate with other generations in the workplace? within BI?
  • What are the criteria necessary to make an ERG like yours successful? What role do NxGen members, executive management, and the overall company have in its success

Attachment: NxGen Case Study for NALC 2010

(Published also as “Expert Insights” in the Network and Affinity Leadership Handbook, Powerful tools for Employee Resource Groups, p.76-79, Diversity Best Practices, New York, NY; 2010)

How to attract an executive sponsor?

Effective executive sponsorship is a key success factor for ERGs. This posting discusses the benefits of executive sponsorship and how to attract and recruit an executive sponsor.

How to attract an executive sponsor?

All right, I take it you started building you ERG business case, as this is the first step to get executive support to move on. (See previous posting.)

You want to make sure the ERG’s goals are not only aligned with the company’s business strategies and are measurable! Having a clear and unambiguous success metrics at hand is the best basis for argumentation, to check your progress and finally document your success. It makes it so much easier to build credibility and trust as well as to communicate success clearly to get support throughout the organization. (Metrics will certainly be a future topic here!)

So look at the business areas, the strategic goals and high-level projects that your CEO communicates. Consider thinking along those lines to flesh out the need for your ERG, to set goals and getting ideas for projects that your ERG could work on in support of the business.

What you aim for is attracting a powerful executive sponsor that serves you and your ERG in several ways:

  • Support and promote the ERG’s activities actively
  • Help you navigating through the deep waters of corporate politics to keep you and your ERG out of trouble
  • Build alliances
  • Point out opportunities  and
  • Provide some basic funding to run the ERG
  • Offer advice when you need it (or when you think you don’t need it but then find out you were blindsided and now are happy you sponsor picked up on it!)

Look at your executive leadership team for a sponsor that has a vested interest in your ERG and its goals. Go out and talk to them, pitch your idea! Be creative how to approach them (this is actually a nice future topic by itself!). – You may be surprised how willing executives listen to compelling business logic that you unfold in front of the.

What are the business needs of the executive sponsor? Build them into your business plan. Consider synergistic ERG projects that will also help your sponsor achieving their goals. You may even ask what you could do for them and make sure to find out what the sponsor’s expectations are.

Be very respectful of their (valuable) time. Make it easy for them to follow you (give an informative summary, for example) and prepare for them what you want them to do (such as drafting an email you want them to send out).

Remember, from the executive sponsor down to each recruit each person wants to know: “What’s in it for me?” – Prepare to deliver!

How to start building a business-focused ERG?

Identifies the key objectives for any business-focused ERG and practical advice how to get started by developing a business case for founding an ERG.

How to start building a business-focused ERG?

Let’s start with what it takes to found a successful ERG on a high level and then drill down to real-life examples and practical advice.

What you cannot go without is a strategy that creates a business need before you drum up people which creates a buzz! You will have to make sure that you never run short of

  • Executive support for your ERG,
  • Recruiting members,
  • Showcasing your achievements and
  • Communicating effectively to meet the above three goals.

My approach was to build a business case to prove the company’s need for having the ERG.  To convince executives, explain to them what is in it for them, i.e. what the benefit is to the company and to them individually by supporting your ERG. Address very basic questions as a first step: Why does the company need this ERG? How will the company benefit from it measurably? What resources do you need to found and sustain the ERG?

Let me know what you think – more to come!