You measure ROA, ROE, ROI, and ROC. But what we never see measured is ROP: Return on People – arguably, a measure of the one key differentiator that drives competitive advantage.

People are your greatest asset… your greatest expense… your worst headache when you don’t have the right ones… and your greatest source of talent, ingenuity, and creativity when you get it right. Evaluating your Return on People in the context of other firms in your industry and the best in the world measures how well you are transforming the ideas, talents, and initiative that walk in the door every morning and out the door every evening, into value for customers.

We consistently hear criticism of North America’s productivity, of a disengaged workforce, of too many unemployed and too many jobs going wanting due to a skills mismatch.

All of which may well be true to some extent.

However, the 2016 Return on People Benchmark paints a different picture. It’s a picture of extraordinary success that can ONLY be achieved through fully engaged and productive people creating value for customers.

It’s also a picture of extraordinary failure – of companies who sell immense amounts of products and services, but have nothing to show for their efforts at the end of the day.

Between the two extremes lie the lessons to be learned and the solutions to our lingering economic woes and turmoil.

5 Paths to Financial Independence For Your Business

What would be possible in your business if you never, ever again had to say “we don’t have the budget for that!” when faced with an expense or good investment that will help grow your business?

  • Benchmark Your Firm: If you don’t know where you are, or what is truly possible, you can’t set meaningful and relevant goals.

I recall your session as if it was only yesterday. You asked us all to plot our “profit per employee” on the chart. Unfortunately, at that stage this indicator was actually negative $9,955 per employee. While our management team knew we were in a loss position, the impact of seeing our “profit per employee” “at the bottom of the class” was very impactful. We immediately set a new goal. For our year ended December 31, 2014, I am pleased to confirm that we achieved $26,671 profit per employee – the highest profitability levels in the organization’s history. –CFO, Major Building Products Manufacturer

  • Be Relevant to Your Market: Whom would your customers name as the gold standard in your industry? If you don’t know the answer or if they’d name one of your competitors, then you probably have hidden issues with customer loyalty, unknown barriers to achieving the top-line growth you want, profit leaks that are impacting your bottom line growth, and service issues that are driving needless cost into your business. Return on People is a catalyst for improving Market Relevance.
  • Engage Your Team How often do your employees “show up” in body, but don’t bring their best selves and all of their abilities to the job? Are they merely working to live, rather than being passionately enthused about the challenges and opportunities that await them on the job? How do you even know? Fully engaged employees take pride not just in their own work, but in the company’s successes and engage others in helping achieve them. Do you measure employee engagement in meaningful ways? Or bemoan that they “don’t get it,” experience undesired turnover and spend a lot of time and energy replacing, retraining, and retaining? Share your Return on People goals as a catalyst for Engagement.
  • Align Your Organization How many of your employees could tell you the 3-5 key objectives for the entire company for the year, and what they’re doing this week in their own jobs to impact those objectives? How many are confused, and spending time on well-intentioned, but non-core work? Core goals must be made personal, so that each and every employee could conduct their own performance review (accurately!) if need be, and clearly know whether they achieved their “must do’s” or not. Well-intentioned performance review documents focusing on “nice to have” behaviors will never drive outstanding execution of core goals, and instead, often lead to sub-optimal performance. Without a high level of understanding and a personal sense of accountability, your oh-so-human employees will lapse into busy work, “urgent-but-not-important” work, and paper-pushing. There’s a reason that the old-fashioned term “Personnel” was updated to “Human Resources” years ago – its all about viewing the talents, skills, abilities, and initiative of your people as an essential resource in your business. Return on People is a catalyst for Alignment.
  • Execute with Intensity When was the last time you achieved all your strategic goals for the year? What would it have meant to your business if you had? It’s people who execute – whether that’s persuasively securing financing, finalizing an acquisition, developing a new product or service, manufacturing to high quality standards, persuasively selling solutions in the marketplace, making sure you get paid, and providing after sales service. But first, the strategy has to be meaningful, actionable, and clearly understood, from Boardroom to Mailroom. Instead, how often are goals re-set within the year… missed (all with good rationales, of course)… or displaced by other priorities? Return on People is a catalyst for Execution.

My personal challenge to you.

84% of companies are a C, D, or F on the report. If every company simply set their sights to move one grade higher and built a proactive profit plan to achieve that goal, we would have a prosperous and thriving economy. Most won’t. Will you? Download the Report, benchmark your current state, and commit to achieving a higher grade in the coming year.

Want to step up to the Challenge, but wondering how to create the kind of significant profit increases that will move you up a grade? Email me to find out about ProfitU, the innovative in-house, learn-by-doing program that will get you there more quickly, delivers a 100% ROI within 90 days, and requires less time to implement than what you’re spending on email.

What’s your grade today? What grade have you set as an objective?

#1 Bestselling Author, International Speaker, and Accelerator Anne C. Graham is on a mission to help 5 million business leaders and their teams double their profit per employee – or more – in less than one year, in less time per week than they’re spending on email per day. Her new book Profit in Plain Sight includes the 5-step proactive P.R.O.F.I+T Plan to do it.  Connect with Anne on Twitter, LinkedIn and Facebook.