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Hospital Corporation of America (HCA) is one of the nation’s leading providers of healthcare services, a company comprised of locally managed facilities that includes about 162 hospitals and 112 freestanding surgery centers in 20 states and England and employing approximately 205,500 people. Employees play a critical role in helping HCA deliver high-quality care to its patients around the globe. To help employees and their immediate families who are experiencing financial hardships, the 
Conference exclusive: Measuring the business value of social impact
By David Wood
In “Beyond the Business Case: Measuring the Business Value of Social Impact,” Jason Saul of Mission Measurement walked a packed house through his model for measuring the value of corporate citizenship in ways that make sense for a company’s business value.
Saul believes that the key to good measurement is a tight focus on the outcomes you want to achieve, not the activities you think will achieve them.
Don’t measure how many employee volunteer hours your company has logged over the past year – you need to measure how many employees consider themselves actively engaged with the company, or see themselves aligned with its values.
Don’t measure how many customers know about your environmental commitments – measure how much brand loyalty has increased.
Set the outcomes you want to achieve first, then work backwards to identify measurements, then identify strategies that will move those measurements in a positive direction. It’s an engaging strategy that allows citizenship professionals to focus on the goals that their colleagues, and bosses, can understand.
Saul’s system doesn’t make measurement easy – you’ll still have to figure out just what kinds of data will help you measure outcomes, how to balance quantitative vs. qualitative data, how to craft a compelling narrative for your strategy, and so on. But if your goal is to tie citizenship to business value, the focus on specified outcomes is a excellent place to start.
So what do you think? Do you find these measurement tips helpful? Can you offer any others?
I have been a long-time advocate of outcomes-based measurements and third generation corporate responsibility. However, I’ll use this posting to play devil’s advocate. I believe that there needs to be some balance that allows corporations to engage in socially responsible activities beyond what increases revenues, improves brand image, or cuts costs. I worry that should companies focus solely on how their activities impact the bottom line, we will see a convergence of philanthropic activities into a few societal issues, such as environment and sustainability, which more readily relate to corporate activity. As a result, many important needs may be overlooked that corporations have the capacity to aid.
Furthermore, as corporations merge their social strategy with their competitive strategy, we may see a blurring between activities that are truly socially responsible and those that are not. I feel that this could occur particularly because it is difficult to define what a socially responsible activity is. Could a company claim they are engaging in corporate responsibility because they are producing a product that just so happens to make people’s lives better? With an integrated CSR/competitive strategy, how can a corporation clearly define activities that are going beyond their basic business principles and pursuing a clearly defined plan for social impact?
And finally, operations-based measurements in social responsibility can be a challenge to quantify. It is possible that companies will become so consumed with trying to measure their socially responsible activities that they forget to actually do the activity. In the end, this could limit the impact the corporation has on positively impacting our world.
While all of these concerns are valid, I do believe that they are possible to overcome. I am excited to see how corporate social responsibility and innovation develops as new generations of social conscious business leaders enter the workforce.
Analyzing outcomes rather than activities is the right approach to creating and demonstrating a CSR program’s value. It is important to recognize though, that this “value” is not necessarily transparent in the bottom line seen by shareholders. I don’t see that as a problem. While shareholders focus on near-term returns, and CSR programs tend to have more long-term value, I think there are ways to demonstrate that short-term achievements in a more qualitative sense, will create long term value in a quantitative sense. As Jon Saxon points out above, General Mills created a program to improve retention of minority employees and effectively communicated the value in this achievement to its shareholders. Another potential form of qualitative measurement that can translate to quantitative results can be seen in the risk management arena (also discussed in the McKinsey report). As a result of forming relationships with regulators, a company can tabulate the number of new laws it had a hand in developing. By emphasizing short-term qualitative achievements, companies may be more effective in demonstrating that these programs will lead to long-term shareholder value.