Prabhu Guptara, executive director of Relational Analytics, leads the work on measurement of the quality of companies’ internal and external relationships. He explains why relationships are the new resource.
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Highlights of the discussion:
- Public value to me means to be able to encourage organisations and individuals to not just live their lives or operate in a way that is only to their own advantage, but also to function for the advantage of the public at large. Public value can only be delivered in a sustainable way.
- Relationships are emerging as a key driver of value and risk. Many struggle to measure relationship quality. There are five dimensions of relationships: between individuals; between an individual and an organisation; between different organisations; or between an organisation and its stakeholders. Relational Analytics is a way of measuring these five dimensions because you cannot improve something in a systematic way if you do not measure it. It is about putting relationships at the centre of any strategy.
- We argue that while figures will give you the financial health report, this financial health report tells you what happened in the past, but it doesn’t tell you what is happening right now, nor does it tell you what’s going to happen next. This you will learn through the quality of your relationships, because it covers communication, the use of power, the alignment between organisations, how far they’re working together, or with which effectiveness they’re working together.
- The trend (of companies being involved in public value) is growing very fast. In the last election in the UK, the Green Party was one of the biggest winners. One of the reasons, certainly, is that people are more conscious of environmental challenges. Companies have to take this trend into account because the risk of loosing customers if they don’t is very high.
- People usually have a one-eyed glass on that looks at finance. In today’s world one needs to have two lenses, a finance lens, and a relationship lens. You have to keep a holistic view of all your relationships or, if you like, of all your stakeholders. This is another reading of public value, a different mindset.
- In the past people thought that public value or being socially responsible could be beneficial in the long-term, but in the middle- and short-terms it would be a disadvantage. This is no longer the case. Particularly since the 2007 financial crisis many studies have shown that companies that are the most corporately responsible and take public value most seriously are actually the companies that benefit most, not necessarily in a three month-timeframe, but certainly in a three year-timeframe. Public value ensures the long-term future in a way that the short-term thinking does not. Studies show that short-term thinking has destroyed corporations within three years.