What’s the capability & engagement ‘value’ of your organisation and how can you measure it?

Measuring Organisational Value

Sam Russell

By: Sam Russell – October 2015

It’s often said that the true value of an organisation is nothing more or less than the sum total of the capabilities of its workforce and, of course, their willingness to implement them (i.e. their engagement levels and work ethic)…everything else in an organisation being just buildings, machinery, stationary, vehicles, etc.

But what does this actually mean and how can we in the learning and development space use it?

Well, let’s assume (as per a competency framework) that each role has a set of capabilities (i.e. skills, knowledge, and experience) needed to perform the tasks required of it and a level of engagement that indicates the willingness to put these capabilities into practice.

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For ease of explanation, let’s say each role has ten such capabilities and we’re going to give a score out of ten for each (0 lowest, 10 highest). We’re also going to score each person’s engagement level in the same way.

With a workforce of ten people, we have a possible ‘perfect’ score of 10,000/100% (10/10 score for each of the ten required capabilities for each role multiplied by the 10/10 engagement level multiplied by ten staff….in other words, 10 (each person’s capability score) x 10 (number of capabilities per person) x 10 (each person’s engagement score) x 10 (total number of staff) = 10,000 … so, with a score of 10,000 out of a possible 10,000, the organisation has a score of 100%…with me so far?.

Obviously, when you apply this to a real workforce, you’re going to get a huge variety of scores for each person and their capabilities and engagement levels and each value is going to be needed to be worked out in its own right. However, to (again) make things REALLY simple, we’re going to assume that everyone in our example company has a score of 6/10 for each of their capabilities and 5/10 for engagement.

This means that out of a possible 10,000, our example company has an actual score of just 3,000/30% (6 (each person’s capability score) x 10 (number of capabilities per person) x 5 (each person’s engagement score) x 10 (total number of staff) = 3,000.

This method can be applied to any organisation and by turning the score into a percentage, you obviously get a consistent value (regardless of size, industry, etc).

Of course, there’s no way EVER that any organisation is going to achieve (let alone maintain) a perfect score no matter how capable and engaged its staff is. However, by understanding (or, perhaps more importantly, getting the powers that be to understand) that your organisation’s true value (and therefore its productivity, profits, staff retention, etc) is entirely based on its workforce’s capabilities and engagement levels and clearly showing what your current level/score is; you can win significant support at every level for your training programs, not to mention track how well your programs are going!

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