A CEO… should be tracking and managing by the numbers—the nonfinancial numbers. By the time financial results turn downward, it is far too late to act. Financial numbers measure the past and lead to “rearview mirror management.”
The numbers that predict the future are the Four Rs-employee retention and referrals, returns to labor (productivity), and relationships with customers (exhibited by loyalty and ownership behaviors such as referrals)—as well as measures that track innovation. Once these numbers start to turn downward, it’s time to reexamine organization values and behaviors, hiring practices, and other elements of the culture cycle.
Content: Quotation
Author: James L. Heskett
Source: Harvard Business School (HBS) Working Knowledge
Subject: Measurement
Author: James L. Heskett
Source: Harvard Business School (HBS) Working Knowledge
Subject: Measurement
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