How to Measure Value for Long-Term Growth

Business meeting

In order to put an organization in the best possible situation, leaders should anchor their approach to long-term value. 

Changing market conditions caused by shifting consumer demands and developing regulations have had an impact on nearly every company in every industry worldwide. This uncertainty has driven many leaders to reevaluate their long-term strategies and explore new opportunities created by a changing economy.

Pivot with urgency, but never forget your “why.”

Despite the emphasis on a company’s ability to make swift adjustments in the midst of a pandemic, leaders are still expected to maintain a sense of authenticity amongst consumers and employees. Put simply, succeeding in today’s economy is becoming increasingly dependent on an organization’s ability to explain why they do what they do.

Technological advances give stakeholders an opportunity to speak up and influence markets through the use of social media and other digital resources. Millennials play a role in these changes, as they represent nearly 25% of the current workforce and are often credited with bringing a greater focus on purpose, both as consumers and employees.

Wondering where to begin? Focus on the data.

It can be tough to know where to begin as a leader today, but remember the importance of reliable data — As Peter Drucker once put it, “if you can’t measure it, you can’t improve it.” A company’s purpose and long-term strategy should reinforce each other, but that requires a clearly articulated purpose and a long-term strategy founded on strong metrics. It’s a four-step process:

  1. Understanding the context in which your business operates.
  2. Identifying stakeholders and understanding what they value.
  3. Gaining a clear sense of your organization’s strategic capabilities.
  4. Developing metrics to evaluate long-term value creation.

Get these right, and your organization can unite purpose with long-term strategy.

Your purpose must extend beyond profitability.

Our world is becoming increasingly filled with distractions and disruptions, which has changed the way we look at capitalism on a global scale. This “new capitalism” emphasizes providing significant value to a wide range of stakeholders above all else. In today’s economy, companies are expected to be financially successful in the long-term – but they’re expected to simultaneously contribute to solving the problems facing people and our planet.

To put it simply, companies can no longer rely on their profitability to keep them at the top — they must also provide a certain amount of value to society-at-large. 

For consumers and businesses alike, this is a positive change in the way we buy, sell, and produce goods. Companies are the world’s most powerful engines for growth and prosperity — and the world is better off when business behaves in ways that create long-term value for all stakeholders.

Improvements in technology have given us unlimited opportunities to turn the potential for good into real action. By accurately and effectively measuring the creation of long-term value, our words will one day become our new reality.