Beyond Numbers: Measuring Success in the New Age of Finance
Imagine running a company where profit isn’t the only measure of success, and the focus shifts to include all areas of impact—from the well-being of employees to environmental responsibility. CFOs are discovering that true success is about more than a healthy balance sheet. Here are some of the new ways to measure success that can add lasting value for businesses in South Africa.
1. Stakeholder Value Over Shareholder Value
Traditionally, success was all about shareholder value—the profit returned to those who invest in the company. But today, stakeholder value is gaining importance. This approach considers the impact on everyone involved, from employees and customers to suppliers and the wider community.
Why It Matters: A company that values all its stakeholders often sees stronger loyalty, trust, and support. This shift can help businesses grow in a way that’s both profitable and sustainable. CFOs should ask, “How are we delivering value to everyone who’s part of our business?”
2. Environmental, Social, and Governance (ESG) Metrics
ESG factors—covering how a company manages its environmental footprint, treats its employees, and governs itself—have become key indicators of a company’s responsibility. These practices are essential as countries, including South Africa, put more regulations in place on environmental and social issues.
Why It Matters: Focusing on ESG can build a positive reputation and attract investors who are looking for responsible companies. Businesses that commit to ethical practices tend to be more trusted and resilient in the long run. CFOs can use ESG metrics to go beyond profit and protect the company’s reputation and future.
3. Employee Engagement and Satisfaction
A motivated and satisfied workforce is often more productive and brings new ideas to the table. Employee well-being is now a priority for companies, and high engagement often leads to lower turnover rates and a stronger workplace culture, benefiting both employees and customers.
Why It Matters: When employees feel valued, they’re more likely to give their best at work. A positive work environment translates into company success in ways that aren’t always visible in financial statements. CFOs can measure employee engagement as a vital part of the company’s health.
4. Innovation and Adaptability
As technology and customer needs change, the ability to innovate and adapt can be more valuable than short-term profits. Companies that prioritise new ideas and flexibility are more likely to stay relevant and competitive.
Why It Matters: CFOs can support a culture that values innovation, even if it doesn’t show immediate financial returns. Investing in technology and research can lead to long-term growth and stability.
5. Customer Loyalty and Satisfaction
Loyal customers are key to long-term success. They’re more likely to return and to recommend the business. Customer satisfaction and loyalty metrics, like Net Promoter Score (NPS) and retention rates, provide insight into the company’s long-term health.
Why It Matters: Customers who trust and appreciate the company are more likely to stay loyal, even if the competition is strong. CFOs should view customer loyalty as a valuable, sustainable asset.
6. Digital Transformation
As more of the world goes digital, companies that adopt technology often work more efficiently and serve customers better. This includes automating processes, using data to make decisions, and working with cloud technology.
Why It Matters: Going digital can reduce costs, increase productivity, and offer faster and more accurate information across the organisation. CFOs can see digital transformation as a measure of how ready the company is for the future.
Final Thoughts: A Broader View of Success
Success isn’t just about the numbers. It’s about creating a strong, lasting foundation that supports growth across every aspect of the business. By measuring success through a broader lens—balancing profit with purpose and impact—CFOs can help build businesses that thrive now and, in the years, to come.
These broader success metrics provide a guide for smarter, more strategic decisions, setting the stage for a successful future that goes beyond the bottom line.