By Will Ruch

Companies are faced with a myriad of pressures when assessing corporate value during periods of economic uncertainty. The goal is to ensure a stable and fully functional enterprise. The organization’s financial indicators - economic dimension - are evaluated and drive decisions regarding the promise of improvement to shareholder and customer value. Since the focus is on the immediate financial response of the company, other important organizational dimensions of corporate value are often ignored.

Senior executives have recognized for some time that sustainable competitive advantages are built through the innovation and the transfer of ideas and not just through controlling the bottom line. In order to retain the best and the brightest within an acquired company, you need to carefully evaluate all the key associates within an organization, not just those sitting across from you at the table. It is this second organizational dimension of corporate value – the human dimension – that is the link to developing a sustainable difference in building the corporate brand.

These two traditional organizational dimensions – economic and human – have been the driving force behind corporate growth and value. However, new research indicates that there is an emerging third organizational dimension that should be added to the corporate equation for success. This organizational dimension, more pronounced post September 11, 2001, is an additional and necessary valuation to ensure future corporate financial growth.

This third organizational dimension - social - focuses on the workplace community. It brings to the economic table that element which builds on concepts like meeting shared needs, building employee loyalty and experience before the brand. The social dimension is recognized as a foundation for attracting and retaining the human resources that create opportunity for the successful accomplishment of the organization’s financial dimension.

Hewlett Packard’s recent SEC filing on the Compaq merger makes the point: "in order to be successful, the combined company must retain and motivate executives and other key employees, including those in managerial, technical, marketing and information technology support positions...experienced management and technical, marketing and support personnel in the information technology industry are in high demand and competition for their talents is intense."

The filing continues "the combined company also must continue to motivate employees and keep them focused on the strategies and goals of the combined company, which may be particularly difficult due to the potential distractions of the merger, morale challenges posed by the separate workforce reductions being implemented by HP and Compaq, and the additional workforce reductions of the combined company anticipated in connection with the merger."

Many companies don’t appreciate the basic generational and demographic differences that are more prevalent than ever in the “melting pot” that is today’s workplace. Nor do they realize the importance of understanding and leveraging the different attitudes and values held by their associates in order to capitalize on the knowledge they hold. Turnover increases and becomes an obstacle to financial growth. As a result, companies that experience turnover rates of 50 percent and higher, often are experiencing an equally shocking 50 percent customer turnover.

Until recently the relationship between a company and its employees was solely the domain of the human resources department. However, current research suggests that the only way a company can truly thrive is if employees “live” the organization and deliver on the promise to the marketplace.

As a result, senior management is taking note, reevaluating the corporate/employee relationship, and recognizing that marketing and management behavior contribute to building a positive workplace environment. Therefore, the relationship between employees and companies are shared equally among human resources, marketing and operations.

The key to strengthening the human and social dimensions of a company is “Employer Branding” – the practice of combining proven marketing techniques with cultural change. This process, similar to consumer-targeted marketing and branding efforts combined with organizational development, strengthens that often-intangible asset of an organization that contributes to recruitment and retention of high performing employees. Once an Employer Brand is established, the organization is on the path to becoming an Employer of Choice with the ability to recruit and retain top talent – an important competitive advantage in the marketplace.

The only remaining guarantee of long-term survival for most organizations will be the ability to deliver a distinctive promise to the marketplace through the behavior and commitment of employees. The “art of the deal” has changed. The new rules demand that human capital be factored into bottom-line thinking. Simply put, the end result of focusing on human capital is greater customer satisfaction. That is to say “experience before the brand.” And satisfied customers will keep coming back, ensuring financial growth.

Is it important?...you decide.

About the Author

Will Ruch is the CEO and managing partner of Versant in Milwaukee, Wisconsin and has been with the communication company for over 20 years. He is responsible for leading the client services division of the agency, as well as overall strategic planning for the company and its clients. Will has worked in a wide variety of categories including retail, technology, healthcare, automotive, education, financial and insurance. Through initial work with Northwestern Mutual Insurance, Sears, and Kohl’s Department Stores, Will has become a leading authority on Employer Branding and its impact on growing human capital. A number of Fortune 500 clients have engaged Versant to help them understand the impact of generational marketing and branding on their ability to recruit and retain great employees.

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