Increasingly, company leaders are realizing that they can no longer afford to focus exclusively on financial results, and that long-term success depends, in part, on their ability to accurately measure the soft side of business - factors such as employee morale, customer loyalty, and leadership, among others, which are sometimes difficult to quantify.
It's a step in the right direction, consultants and business watchers say, because learning how to measure (and ultimately predict) the soft elements as well as the strict, black-and-white financials can help businesspeople answer a larger, more intriguing question: Are companies good because they're profitable, or are theyprofitable because they're good?
Some forward-looking companies, for instance, are trying to figure out where their uptick in employee satisfaction shows up on the bottom line. Others are wondering if their investment in training will ever pay off and, if so, to what extent?
One thing's clear to Tom Olivo, president of Success Profiles: "In the next decade, everyone will have tomeasure the soft elements of business to stay competitive. Companies want to emulate the employer of choice."