Measuring the measurable
In Module 2, we said that there is one significant area that most businesses struggle with and that is measuring the effectiveness of ethical policies. In the response to the survey, just under 40% of companies did not measure the effectiveness at all, saying things such as:
- We do not currently measure its effectiveness - we don't have the knowledge or tools to do this.
- We do not at present although use our network and engagement to temperature check
- It is genuinely hard to measure, as we don't do it for a return. We do it because it's right.
Other businesses are using more ambiguous terms to describe how they attempt to measure the impact of their business ethics, such as through conscious efforts, values and standards and research. Then there are others that measure the outcomes of specific initiatives such as living wage or social value.
Whilst not being critical of any of these businesses this issue goes to the heart of what it means to think about business ethics. The problem with measurement lies in the difficulty in describing what is meant.
In module 1 we saw that ethics differ by individuals and companies and this shows there can be no single measure, recognised by everyone, of how ethical your business is. Just as Marcel Duchamp said ‘It’s art if I say so’ then it is up to you to define what is important to you and how it shall be measured. Your business ethics are what you say they are and in the end, there is only one way to measure business’ ethics and that is through your own or your company’s prism.
Taking this approach allows you or your company to define a set of metrics that measures itself against its one values and ethics. You set out your stall, these are my business ethics, this is how I measure them and here are the latest results.
There can be no ambiguity as long as the measurement is accurate, unambiguous and consistent. There can be argument and discussion however. Are these the right measures? Can these be considered as ethical values? Do they reflect the company I am working for or dealing with?
Such an approach emulates the business planning approach, which sets out to achieve an objective such as sales, income, growth or number of widgets manufactured and is monitored on a regular basis and revised over time. It also allows the stakeholders in your business to judge your ethics against their own, underpinned by measurement and make decisions based upon this understanding.
The interesting part however is deciding what you are going to measure. Donald Rumsfeld, former American Secretary of Defense, famously said ‘There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know.’
In the same way there are measures that are easily measurable, measures that should be measured but are harder to and things that cannot be measured. In this module we will look at the measurable measurables and cover the immeasurables in module 4.
Questions to consider:
- What are my business’ ethics?
- Which of these are measurable?
- How will I capture the information?
- What am I prepared to publish? (hostage to fortune)