Promises Kept is Money in the Bank

As a psychometric firm, we run a lot of numbers at Corvirtus. One of the most interesting analyses we run is to correlate a company’s organizational survey data with its financial data. Time and again, we find dramatic financial performance gaps between business units that people feel are keeping their promises to customers and employees, and those that people feel are not keeping their promises.

As an example, in a company with 34 identical business units, we asked the employees whether their leaders decisions were consistent with the “promises” that the company made to its employees and customers. For example, a company's promises to employees might include things like providing clear direction and fostering a sense of belonging and purpose.

When we compared employee responses to the financial performance of those same business units, we found remarkably better performance in the units whose leaders kept the promises. Specifically, comparing the units whose leaders kept promises most of the time (according to their employees) to those who least often kept promises, we found the promise-keeping units had 28% higher sales, 39% lower waste costs, 21% lower labor costs, and 36% lower employee turnover for the year. In addition, the promise-keeping units enjoyed higher productivity and customer satisfaction scores.  

As I mentioned, this is no anomaly, as we find the same sort of relationship every time we run the numbers with a variety of companies. The differences in business unit performance in a single company often equates to millions of dollars left on the table.

The lesson here is simple in theory, but not in terms of execution. Specifically, as a leader, make sure you can precisely articulate what your company promises to its employees and customers, and make sure you know how you and your team are expected to fulfill those promises. Maintain that clarity of intent in your mind and state it publicly and often. Finally, set the expectation that behaviors are just as important as results. The best way to set that expectation (and achieve your desired financial results) is through your own example.