Understanding your business's current state of financial health involves measuring a variety of different factors. Of course, financial concepts like cash flow, profit and spending are all vital to every business. You wouldn't be in business if you didn't want to make money, and a company needs sustained positive earnings to be successful in the long run. However, there's more to success than just money, and a lack of attention to other important metrics could eventually harm your company's bottom line and negatively impact your business.
Let's look at how to develop a balanced scorecard for your organization that goes beyond finance and explores areas ranging from worksite safety to employee engagement.
A safe workforce is a productive, profitable and positive one. No one enjoys working around hazards, and the regulatory impacts of a failure to comply with established occupational health and safety standards can cause serious negative impacts on a business. Keeping track of employee safety and taking regular action to improve it is therefore vital.
As the owner and ultimate decision-maker of your enterprise, you have a responsibility to protect your employees from common, foreseeable hazards. You know your business better than anyone, which gives you a good starting point. If you've noticed minor issues with equipment or at worksites, or a few employees have pointed out concerns you haven't personally encountered, resolve to take corrective action before anything more serious happens. You should also start conducting regular inspections while you're on-site, looking for both tools and safety equipment that might need replacing as well as potentially unsafe behaviors from your workers. If you're looking for specific issues to become more aware of, this list from For Construction Pros is a good place to start.
You must also consider the safety and reliability of your heavy equipment, which can pose major dangers to employees. If it's time to look for new equipment, get in touch with Cat Financial. Our array of lease options and working capital loans can help your company put new, efficient and safe equipment to use without delay.
You may or may not have a strong personal interest in sustainable operations, but the amount of waste generated by a business and how disposal is handled are increasingly important considerations.
Research from McKinsey & Company showed a continuing connection between sustainable practices and practical benefits such as business growth and reputation management. Cost savings and more efficient operations are also possible benefits of a carefully considered strategy for minimizing environmental impact.
Sustainability also ties in to regulatory concerns. Just as the Occupational Safety and Health Administration (OSHA) and state agencies oversee occupational health and safety requirements, the Environmental Protection Agency (EPA) and related local and state-level groups manage environmental rules. A failure to comply with certain regulations can mean slowdowns in work, fines and several other negative outcomes as the issue is sorted out. As these requirements become more strict over time, businesses have to make sure they can comply with changing demands.
Your employees' overall sentiments about their day-to-day work and long-term prospects can have a major impact on the quality of the work your company performs. Even when you strive to only hire trustworthy, dependable employees, their level of engagement can still influence the culture significantly. For your organization to perform at its best, you need to make reasonable efforts to boost engagement and make workers feel valued.
Some seemingly small gestures, such as the commitment to safety outlined above as well as showing interest in employees' lives and respect for them in general, go a long way. You can take the next step and occasionally buy lunch on the jobsite or organize a holiday party or something similar, although you shouldn't rely on this type of engagement boosting exclusively. Promoting from within when possible and offering both new responsibilities and reasonably increased wages, if practical, is also an effective strategy - if it's followed appropriately.
A happy and satisfied workforce contributes to a successful business. Make sure you understand the attitudes of your employees and look for practical, reasonable ways to boost morale.
There's no magic measurement to track safety, sustainability and employee engagement. However, you have the ability to keep an eye on all three and make positive adjustments when needed.