11/14/2017 | Jane Frankel

Middle market companies can be wildly successful, reach a plateau, and then need to be creative about their growth. Most middle market companies, with annual revenue of $10M to $1B, agree that growth is important for survival based on continuously changing conditions and competitive forces. These businesses are working in their businesses, solving customer issues, working in crisis mode, etc., with little time to work on their businesses, on their growth strategy or on the infrastructure that will implement that strategy.  One way to systematically and organically add that necessary infrastructure is to engage company members in considering how they think about and complete their work. Measuring one’s work in the context of the company’s direction, strategy, goals, and the work of one’s peers makes that work much more meaningful to company employees and in its impact on company growth. This metric mindset creates a culture of positive experiences that enables employees to help the company and themselves grow.

While attending a recent conference, CEO Conmidnection, I was intrigued by the pervasiveness of the discussion of organizational culture as an essential element for employee engagement and company growth.  While this is not a new idea, I started to think about the nature of a culture that would foster a sense of employee engagement, recognizing today’s emerging workforce and its needs, in a company’s well-being and continued growth. Generally, today’s emerging workforce wants to be autonomous and value creators as they strive for making an impact. A culture of measurement allows them to leverage these characteristics for most effective results.

Building a Lucky Environment
Robert Frank, in his book "Success and Luck" (1), points out the importance of luck in addition to talent and hard work in getting to success. His premise is that there is always a context within which success is likely to happen. Being born in a well-developed country is lucky. It provides the supporting infrastructures, such as adequate food, formal schooling, governmental support, usually family support, etc., that are often not available in underdeveloped countries. So, even with great talent and the energy for the hard work necessary to succeed, without an infrastructure to support an endeavor, one is at a great disadvantage in being successful. As Barack Obama and Mitt Romney both pointed out, “No one is successful alone.”

I suggest that creating a supporting infrastructure of positive experiences using measures, recognition, and rewards in a middle market company can create a company’s own lucky environment. The metric mindset establishes a common mode of work and a roadmap to reach company goals. Each employee has his/her own set of work metrics, which also must align and support internal stakeholders’ needs. When individuals set and measure collaborative goals, they build a cohesive organization…with everyone working towards the goals of the company. 

Additionally, these metrics set a frame for experiential learning, allowing all company members to design, do, evaluate, and redesign their work to ensure success and growth. They find themselves continuously adjusting their work to accommodate internal and external customer needs as they occur, becoming a results-oriented organization. This organization builds an automatic and organic growth infrastructure, integrating the work of daily activities and operations. This platform becomes the “lucky” component that complements employees’ talent and hard work in achieving success.

Kaplan and Norton in "The Balanced Scorecard" (2) provide a framework to streamline and focus company activity toward the longer-term growth goals of the company. This framework integrates traditional financial measures with measures of customer behaviors and needs, internal work processes, and learning outcomes for innovation. These four measures require engagement and focus on individual, but integrated, work goals that align to company targets for growth. When developed in a middle market company, this framework sets the expectation that all work is results-oriented.

Using the Metric Mindset to Build the Growth Infrastructure
A small, but aspiring, middle market company in the healthcare industry decided that social media would help with acquiring new customers. The company grew for five years, but hit a plateau when a few competitors started to challenge its business. The company leaders had developed a few new value differentiators, but were not finding success in building awareness of these in the market. The company was not losing customers, but it was not acquiring new ones. The Marketing leader decided to engage a social media expert, Kim, to build a social media campaign to increase awareness of the company’s unique value, and, thus, improve its customer acquisition rate.

Kim started with building general context of what the company wanted to achieve, its products and services, its competitors, and target customers. The financial goal of the company defined the goal for the social media activity, based on the number of customers to be acquired. The campaign had to address the right potential customers so Kim had to establish the characteristics of potential customers, quantify the number of those who needed awareness of the company’s unique value, and qualify their specific “needs to know.” What did these potential customers need to know to motivate their decision to buy? Her metrics for this activity included:

Financial goal
Number of customers available
Number and nature of targeted customer concerns
Relevance of new company differentiators to targeted customer concerns

Next, she identified the company members, including processes, departments, and functions, who would collaborate on her messaging to the target customers. How would Kim partner with other company members to support her social media project? Her metrics included:

Engagement of company members
Identification and satisfaction of company member needs with her social media outreach
Company member contributions to her social media campaign

Finally, Kim had to identify what she could learn from her efforts. What would she evaluate (experiential learning) to gain insight for always improving her efforts? Her metrics included:

Response rates to various types of postings, surveys, etc.
Prospective customer conversions to buyers
Feasibility of the financial goal
Relevant suggestions for company members as stakeholders

These metrics allowed Kim to design, evaluate, and modify her work, as needed, to improve the results of her efforts toward reaching the financial goals of the company.

The Resulting Growth Infrastructure
The company implemented a frame of experiential learning based on a series of relevant metrics. As all company members worked in this manner, a growth mindset and infrastructure prevailed. The company leaders provided members with expectations and experiences that reinforced the mindset that company growth was the work of all employees. The message on measuring was heard well. The company supported this message with a metric culture, their “lucky” platform. Everyone in the company is effectively working on growth.

References:
1. Robert Frank, Success and Luck Good Fortune and the Myth of Meritocracy, Princeton University Press, Princeton, NJ, 2016.
2. Robert Kaplan and David Norton, The Balanced Scorecard: Translating Strategy into Action, Harvard Business School Press, Boston, MA, 1996.