For some years now, I am experimenting with value in my company Peer!, a Seats2meet location. It is a conference location and has an open structure. Everyone can walk in and work in the workspace, they pay in social capital, an example of this is sharing knowledge. The meeting spaces are paid for with monetary capital. Often other company owners ask me: ‘How is it possible to earn money if you give away your workspaces for free?’. I explain that it is not for free, the people that work with us also book meeting spaces, share their knowledge or tell their network about our location. Besides the normal monetary value, our location has a lot of social value and impact, but there was never a way to measure it. Finally there is a way to measure our social value and impact: the Scale of Significance!
Scale of Significance
The Scale of Significance is a new global instrument for the valuation of organizations. It originated at Manifesto, an innovative accountancy firm based in Amsterdam (The Netherlands). Now Manifesto is working together with a core team of experts, professionals and companies of various branches to develop this instrument. It will enable entrepreneurs, investors and clients to assess organizations based on a broad set of values, next to monetary valuation. In this blog I write what my dream is for the Scale of Significance, but it could develop quite differently, when all the experts and co-builders join forces to co-create the actual Scale of Significance.
How to measure significance?
The Scale is still in a developmental phase. I would like to share with you what I think is important to measure based om my experience from the past years in adding, creating and trading value:
- It is important that an organization is transparent and practices what it preaches. In other words, the culture and identity of the organization should be aligned with wat the organization does and communicates.
- The mapping of the flow of value in an organization is important: input and output of knowledge, products, services and collaborations. It visualizes the entire value of the organization and helps people to think in social value, next to monetary value.
- What is the impact in the entire chain or ecosystem of the organization? Do they achieve the purpose they are aiming for or is there a negative impact, where the organization extracts value from its ecosystem?
I will expand on these aspects below.
Practice what you preach
There is a lot of attention for purpose and meaning in organizations. Rightly so, the public and customers no longer accept a company that claims to be – for example – environmentally friendly, but doesn’t practice what it preaches.
It starts with dialogue, with stakeholders, employees and other people and businesses in the ecosystem of the organization. Why was the organization created? What is the purpose of the organization? What can the employees do to add their own value to the purpose of the organization? Dialogue leads to consciousness and consciousness leads to change. If people feel the purpose of the organization and live to it, they will change the organization from the inside.
I see the Scale of Significance as a way of measuring the alignment between identity and practice on one side and communications and marketing on the other side. It is a way to measure the development of a consistent identity and off course a way to measure the progress or results.
Mapping the flow of value
An organization has an open or closed structure. For example, the Scale of Significance is developed by the crowd. Therefore the Foundation Scale of Significance is a very open organization and information flows rapidly into the organization. Knowledge and information going through the company can be seen as value. Next to these two, another type of value is collaboration. Collaborating with other organizations with common goals or interests, on a project that benefits both without invoices for the time spent adds value to both companies.
Spending more money on products that are sustainable and fairly produced also adds value to the company. Not only does it help the people that make the products you also contribute to a better world.
It is a different way of looking at costs and benefits and I say let us add these value flows to the income statement and balance sheet!
Impact is a really commonly used word these days. Don’t get tired of it yet, we are just starting! When does an organization have impact? An example of an impactful company is Tony Chocolonely. They dream of a slave free cacao production. When they succeed, they have the impact they strive for. How cool would it be if we can measure the impact? I hope there will be experts that know how to measure the total impact that is possible and how far an organization is in achieving said maximum impact. I think that these kind of goals are far more important than making financial profit. What kind of impact does an organization have that only acts for financial profit? None!
Measure value in other organizations
Based on my experience with value and significance in my own company, I’ve joined the Foundation Scale of Significance. I am enthusiastic to measure the value in other companies and help them to increase their significance and impact. We start by applying the Scale of Significance and make an actionplan together. Are you ready to change your (companies) way of thinking about value?
I wonder if you have anything to add to my list of three ways to measure value in an organization. Please let us know! Think, build and develop with us. You can contact us with an email firstname.lastname@example.org, reply below or join our Creathon on November 23th 2018 and forever change how the world thinks about value and significance!