Intangibles are defined as impact measures that cannot be converted to money within a reasonable amount of time. But sometimes there is a need to convert them to money. For example: Networking is an important benefit of many programs, yet the monetary value of networking is an elusive figure.
One of Canada’s largest banks decided to tackle this issue. This banking system is on a path to be a major global organization with acquired banks in different countries and expanded divisions within the bank.
Recently, the bank conducted a global leaders meeting at its headquarters in Toronto where the heads of the banking units and banks around the world discussed a variety of strategy and leadership topics. Fifty-two participants were involved in the meeting. The talent development team saw this as an opportunity to enhance networking. Top executives had always thought that operating executives could benefit by working together, perhaps sharing some of the same clients and expanding specialized services to other countries. With the urging of top executives, the team decided to track the success of the networking and attempt to calculate the actual monetary value for networking.
The bank used innovative technology where the name tags of individuals could electronically track networking. The devices tracked which participants met other participants, how long they met for and how many times they met. Participants were asked to keep their name badges with them at all times with this message: “We want to try an experiment to see how much networking actually occurs and the value of that networking. This is not a performance issue. It’s just an attempt to understand the value of networking.”
The bank engaged the services of external consultants to measure the monetary value of the networking. Armed with the data that showed the networking profile, the external firm conducted interviews with each of the participants one month after the meeting to indicate what had happened with the networking, describe what had occurred since the meeting and explain how it connected to the business.
Another follow up was set three months after the meeting with the specific goal of tracking the successes from the networking. A few had very little networking experience with no value. Some exchanged clients or obtained a client from another executive. A few were able to use the services of other divisions. Some were able to provide referrals. Each of these actions and consequences were detailed to understand what happened and what was anticipated to happen.
The participants attempted to place a monetary value on the outcome anticipating the profit (or cost savings) that would be generated from the contact. In some cases, a new client was secured, and they knew the value of a new client based on the average tenure of a client and the average annual profit made with the client for that product line. In interviews with all 52 executives, 21 were able to provide specific data, and seven had very impressive results.
Part of the process included the question, “How much of this improvement is actually caused by the networking?” In some cases, there was a possibility that the improvement could have happened through different channels, without networking — but the networking had helped. In those cases, participants attributed a percentage of the improvement to the meeting. A final question asked for the confidence of the allocation to the networking program using a percent from zero percent (no confidence) to 100 percent (certainty). This is an error adjustment.
When all the money was totaled and divided by all 52 participants, an average value of the networking was $4,265 per person. Although the total amount was impressive, it wasn’t enough to cover the total cost of the conference, but that wasn’t the principal reason for the conference. This value gave executives some comfort that networking activities can add business value.
This case study illustrates an important trend as executives and administrators attempt to convert hard-to-value measures to money. The monetary value is a way for executives to understand the importance of measures typically not converted to money. This can be an eye-opening exercise.