MCBASSI & COMPANY

How Investors Rank Companies

avatar

Bottom line
How investors “grade” a company is almost identical to how the company’s employees grade it.

Implications

  • In a world of increasing transparency, where employees’ ratings of their employers are easily made public (see, for example, Glassdoor.com), shareholders’ interests are increasingly aligned with employees’.
  • Investor relations departments need to be paying more attention to what their company’s HR department is doing, and how that is being communicated to external stakeholders.

The Evidence
Over the past few years, we have been collecting data on how both employees and investors rate companies on 12 attributes measuring company actions and attitudes in three domains: Employers, Sellers, and Stewards (of the community and environment).  For example, one of the attributes measured in the Employer category was whether the well-being of employees was of great importance to the organization being rated.

After assessing each of the 12 attributes, the raters were asked to assign an overall Good Company grade from “A” to “F” to the company they were rating.  We then used combined data from all respondents to analyze statistically the relationship between each separate attribute and the overall company grade.  This made it possible to determine which attributes were, on average, of greater or lesser importance in shaping a respondent’s overall assessment of a company.

Our analysis found the relative importance assigned to the various attributes is virtually identical between investors and employees.  Items in the Employer domain are overwhelmingly the most important for both groups.  For both groups, all four Employer attributes are among the raters’ five most important attributes.

(This post was sent this month via email to our monthly newsletter subscribers.  Click here if you’d like to subscribe.)

Thinking like an Investor

avatar

Ask yourself these questions.  Start with “If I were a long-term investor considering making an investment in the company where I currently work…”

1.  In what areas would I want the company to invest more (time, money, and leadership focus)?

2.  What would I want the company to stop doing?

3.  What aspects of the company’s culture would I consider most important to preserve?

4.  What aspects of the company’s culture would I consider most important to change?

5.  Would I want more (or fewer) employees to spend their time doing what I do?

Since the vast majority of wealth is now created through intangible assets – all of which ultimately emanate from human capital – these questions are particularly important for professionals working in HR, organizational development, and learning.

Can you answer all of those?  Our hats are off to you if have the evidence necessary to confidently answer each of them.  On the other hand, if you’re worried you don’t have a strong evidence base for answering these questions, that’s cause for concern.  It reflects a likely lack of clarity and effectiveness in your company’s HR strategy – and could also mean you should think hard about your own career prospects in an organization like that.

One of our key themes this year is the tremendous power in simply asking better questions (and, of course, being able to answer them).  Asking the questions that investors would ask of you if they were given the chance is a very powerful strategy for guiding HR investments.

At its heart, this is what advances in HR analytics can help you accomplish – asking and answering better, more insightful, more important questions.  And remember – since the time and energy you spend working means that you ARE an investor in whatever company you choose to be your employer, these questions can also help guide you in major career decisions.

 

(This post was sent this month via email to our monthly newsletter subscribers.  Click here if you’d like to subscribe.)

12 Questions to Enhance Your Career, Part 2

avatar

As noted in last month’s newsletter, among our clients, the “better question folks” enjoy disproportionate success.  A key to career success often involves taking a step back and assessing things from a different perspective than many of your colleagues.

The first of the eight questions we proposed last month was the following: “If I were offered the opportunity, would I invest any of my personal assets in my organization?”  If your answer to this question ranged somewhere between “Not so sure” and “You’ve got to be kidding me,” here’s a set of questions for your consideration:

1.  What is it about your organization that makes it a poor choice for investors?

2.  What would it take to turn this situation around?

3.  What role can your department (or function, location, etc.) play in improving the attractiveness of your company to investors?

4.  What does this suggest about the measures and analysis you should be providing to your CEO, Board of Directors, and investors, that would help move your organization in the right direction?

And consider this bonus question: Given your answers to all 12 proposed questions, what role can you play in improving the attractiveness of your company to investors?  Consider possible options for how you might take that path in the days and weeks ahead.  (And if your answer is “none” then you are either working in a hopeless situation, or you have become complacent.  In either case, a change of scenery may be in order.)

(This post was sent this month via email to our monthly newsletter subscribers.  Click here if you’d like to subscribe.)

12 Questions to Enhance Your Career, Part 1

avatar

In our work with clients, we’re always struck by the power of asking the right questions – and the benefits that accrue to those who ask them.  These “better question folks” tend to be up-and-comers who are well-positioned (regardless of job title) to garner important influence in their organizations.

If you’d like to be one of these people – able to guide organizational conversations with better questions – here are three initial questions for you to consider:

1.  If I were offered the opportunity, would I invest any of my available personal assets in my organization?  (If yes, then continue to the following questions.  If no, then you’ll definitely want to read Part 2, which will appear in our October newsletter.)

2.  What are the primary strengths of my organization that would lead me to invest?

3.  What are the risks I would be most concerned about as an investor?

Then, what do your specific answers to questions 2 and 3 suggest to you about the following:

4.   The key strategic directions your organization should be pursuing?

5.   How you should be spending your time as an employee?

6.   Your career trajectory?

7.   What your department should be doing differently?

8.   The measures and analysis you should be providing to your CEO, Board of Directors and investors?

Why think along these lines?  Truth be told, whether or not you actually invest personal financial assets, you’re already making a huge investment: the scarce resource of your time.  Thinking like the investor that you are can lead to asking more powerful questions.  The answers to those questions will help guide your organization – and enhance your career.

Stay tuned for Part 2 of this discussion.

 

(This post was sent this month via email to our monthly newsletter subscribers.  Click here if you’d like to subscribe.)