Professors Virginia Barba-Sánchez, Universidad de Castilla-La Mancha, José Luis Retolaza, Universidad de Deusto, Leire San-José, Universidad del País Vasco, and Adrián Zicari, ESSEC Business School, are the editors for a special issue of Frontiers about Emotional and Social Value of Organisations. In this conversation with the authors, the CoBS explores this special issue.
Measuring the Emotional and Social Value of Your Organisation from an interview by Adrian Zicari. Edited by Tom Gamble. Related research: Emotional and Social Value of Organisations, editorial in Frontiers in Psychology, https://www.frontiersin.org/research-topics/16812/emotional-and-social-value-of-organisations.
At first glance, the issue of emotional and social value for an organisation may seem curious. Traditionally, we look for economic value in organisations – and as long as they are responsible. But looking further, going to emotional value may seem to many people to be far-fetched.
“The point is that in the business world, what cannot be measured by figures usually does not exist,” says Virginia Barba-Sánchez. “Until now, traditional accounting – based on economic-financial ratios – has focused on the economic value created, but we know that this is only a simplified view, especially for companies in the Social Economy sector.” Professor Barba-Sánchez adds: “I come from an eminently rural region of Spain, Castilla-La Mancha, where agricultural cooperatives contribute, for example, to preventing depopulation to big cities. These organisations create value, but it is not explicitly measured. Our objective is to systematize the measurement of this social value. No doubt it is an ambitious objective and not without difficulties, but I am convinced that it is the path we must follow.”
The value of relationships and emotions
“The point here,” adds Leire San-José, “is that in an organisation there are different transactions happening. There are, of course, economic transactions that create economic value, and companies have long-since set up a system to record and measure them. This system is called Accounting and it’s the conventional language of economic and financial accounts.
However, there are many other different kinds of activities and relationships that are important in an organisation. And because of that,” continues Prof. San-José, “it’s important not only to focus on economic value, but also to show society the value that is created beyond this. Such a value isn’t displayed in the financial accounts. It exists, but it hasn’t been measured before. We want to show that it exists and that it matters.”
Regarding emotional value, this matters because an organisation is based on people. And business isn’t only about economic transactions. We need to look at which type of emotions we have in different organisations and try to measure the value of those emotions.
The challenges in measuring social and emotional value
“When we say measurement, sometimes our measurement is good or useful,” reminds Prof. Zicari. “I always remember Kaplan and Nont saying ‘what you measure is what you get’. But some issues are difficult to measure – and perhaps some issues shouldn’t be measured at all.”
“True – it’sdifficult to measure,” chimes in Prof. Leire San-José, asserting that emotions created by an organisation can be measured. For her, this measurement doesn’t have to be much more difficult than measuring economic values. “For some years now,” she explains, “José Luis Retolaza and myself have indeed been developing, improving and putting in practice a system and a method for measuring social and emotional values in organisations. This method works quite well and we’ve used it with many researchers in different companies with good results. Otherwise said, once we have a system and we agree on it, we can reasonably measure social and emotional values in companies.”
However, such a measurement system requires a number of requisites: First is the need to have a method or a system that puts a value on things in a fair way. Second, and importantly, is the need to be prudent, selecting units that are necessary – not more, not less. Thirdly, others need to accept that approach. Indeed, it might not be the best one, but the overriding idea is that others could replicate the procedure. And lastly, if somebody else carries out the same measurement procedure, this person needs to come to the same, or similar result for it to be considered valid and operable.
“In addition,” adds Prof. San José, “we have to bear in mind that by measuring social and emotional values when deploying this procedure, we’ll learn about the organisation, what it does, and how it conducts its business. Otherwise said,” she states, “the issue is not so much – or not only – to come up with a perfect calculation of social and emotional value. That’s great, of course, but the same process of measurement should be aimed at making people and the organisation improve, become more efficient, be better. Because of that, I think that the whole process is more important than the final numbers or rating obtained.”
“Perhaps the journey is just as important as the destination,” adds Prof. Adrián Zicari. “Sometimes we focus on a given point, we focus on the result; but when we learn, it is the process that helps us achieve the result.”
What’s in it for companies and employees?
“A common thread in the articles of this special issue,” says Virginia Barba-Sánchez, “is that we should look not only at the economic benefit generated, but also to the social contribution to the business environment. This perspective enables people-centred accounting. For organisations, my recommendation is to listen to their stakeholders about they receive. Nowadays, generating economic value for investors cannot be the only area of focus. It’s more about how organisations will become more sustainable. However, this new perspective won’t succeed unless it is supported by public decision-makers – for example, through its inclusion as a criterion for public tenders.”
Does it still seem odd to want to measure the emotional and social value of your company? Perhaps not. Perhaps, like the authors, you may well believe that organisations have more to offer than simply profit. Furthermore, it may well be that corporate emotional and social value brings economic value to the company and its stakeholders, for instance, by gaining customer loyalty, fostering client trust and investor commitment. And nowadays, in the context of an employee’s market, social and emotional value can also make the company more attractive to potential job seekers and talent.
- Link up with Profs. Virginia Barba-Sánchez, José Luis Retolaza, Leire San-José, and Adrián Zicari on LinkedIn
- Read a related insight: Cooperating in value-creating networks: A relational view
- Discover ESSEC Business School and apply for the EMBA and GMBA programs.
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