Scorecards and Corporate Responsibility
I am speaking today at the CSR and the Sustainability Scorecard 2010 conference in San Francisco. My views on the topic of scorecards and measurement are contrarian to the mainstream although hopefully not too much. Most of these views have been shared on my blog addressing various issues of measurement and corporate responsibility here, here, here and here.
In our field of CR, we use scorecards for rankings, ROI, KPIs, targeting employees, measuring project impact, labeling products and assessing vendors. But is it effective? I believe that measuring and scoring raises a dilemma for CR professionals—one that can be summarized in three phases:
- “You cannot manage what you cannot measure”
- “Not everything that counts can be counted and not everything that can be counted counts”
- “Lies, damn lies and statistics”
As I pulled together my thoughts for the presentation they coalesced in the following way.
- Measurement is critical to managing business. Numbers are the language of business, but they can also blind us to broader issues which may impact the way we approach and interpret measures. It is part of the role of CR practitioners to help the business world keep a broader and longer term perspective than is reflected by numbers alone.
- To break out of the mindset that CR is only philanthropy and ‘giving back to the community’ and instead have it become part of mainstream business, CR practitioners need to speak the same language as the rest of the business world and prove the value of their initiatives in quantifiable terms, integrated with the overall plans of the business (it is not lost on me that this is in tension with idea #1!)
- Sustainability, as a component of CR, lends itself to measurement; resource utilization can be measured and controlled within the framework of not consuming more now than is commensurate with the needs of future generations. These are quantifiable issues.
- But, if not used thoughtfully and represented accurately, measures can intentionally or unintentionally mislead and in so doing misdirect action. Corporate responsibility practitioners should take very seriously the responsibility of using data and statistics accurately.
- The broader issues of corporate responsibility, especially those concerned with ethical dilemmas, do not lend themselves to resolution by quantification. We should not allow the tempting attraction of challenges that can be measured in neat packages distract us from giving the necessary attention to those which cannot easily be measured.
- A strong focus on materiality is the key to avoiding the pitfalls.
I am interested in your views on measurement. Please share your thoughts with me below.