Proof enables companies and their networks of employees, contractors and consultants to
understand the effects of individual contributions on short-, medium-, and long-term business
success, in context and fully adjusted for time lag and the “ripple effect”
- A company is a network of individuals who have come together to interact for some business
purpose. The right synergy of those individual contributions is what delivers the company’s
performance and success.
- Performance is not just attainment of objectives. It is the strength of the cascading relationship
between attained objectives and business impacts that defines performance and contribution.
- Today few workers know their actual business impact. Fewer still are paid on that basis. Sales
people can be a notable exception.
- Most workers are paid based on time, effort and attainment of volumetric goals with some sort
of presumptive significance as a leading indicator of value. But these longstanding approaches
to performance evaluation and compensation fail to capture a person’s actual impact or value.
NEW YORK CITY, April 17, 2018 – Proof Analytics today delivered Proof P/360, a major update to the company’s award-winning analytics platform that enables organizations and individuals to connect high- performing individuals and teams to critical areas of performance for the larger organization.
“Proof P/360 leverages fully integrated data federation and rock-solid data rights management to
enable individual employees, contractors and consultants to understand their contribution to business value,” said Mark Stouse, CEO of Proof. ‘Proof enables every individual to rapidly network their key performance indicators (KPI) or objectives and key results (OKR) and compute the effects and time to impact of their contributions. The result is a breakthrough in the way we understand how value is created and by whom.”
Mike Barriere, Miriam Owens and Sarah Pobereskin – three leading consultants at McKinsey & Co. –
have written powerfully about the criticality of aligning talent with value creation. In this month’s newMcKinsey Quarterly, the trio published “Linking Talent to Value.” They write, “Companies can more closely connect their talent and their opportunities to create value by using quantifiable measures to investigate their organizations’ nooks and crannies to find the most critical roles, whether they lie in design, manufacturing, HR, procurement or any other discipline. Leaders at such companies understand that reallocating talent to the highest-value initiatives is as important as reallocating capital.”
For more than 150 years, the main basis for identifying and cultivating talent has been individual performance against static, volumetric KPIs: how much of X was accomplished in a given period of time, and how did that compare with the pre-set objectives. More subjectively, companies also have sought to understand the soft measures of an individual’s organizational success — collaboration, leadership and influence – and the relative difficulty of one role’s contribution to value versus another’s. The biggest problem has been that connection between performance metrics and value are, at best, inferred. In the overwhelming majority of companies, there is no computed value chain connecting these sorts of causes and effects at the individual, team, organization or company level.
Similarly, the compensation of employees and contractors for their work has been based directly or
indirectly on the real or perceived value of their job, their presumed level of expertise, the difficulty of
finding top talent for that role, and the expected number of hours they will work. Again, even though
many companies include performance bonuses as part of the compensation plan, those bonuses
typically do not reflect the individual’s actual impact or the amount of value they created.
This cost-basis approach to performance measurement and compensation has been the mainstay of most companies, but changes in technology, societal expectations and marketplace dynamics are enabling many companies to look at new value-based approaches.
Clearly, sales and other roles with commission structures are notable exceptions, and indeed many
leaders say they wish they could find ways to apply similar variable compensation structures more
broadly. Surveys also indicate that most employees, contractors and service providers all want to better understand the value of their contributions and be compensated accordingly. Increasingly, the value of Time and Talent is determined by how much Value they contribute and create.
“Proof P/360 redefines the basis for understanding and rewarding individual performance and
contribution within a team and a company,” said David Williams, senior vice president of portfolio strategy at CA Technologies and a former Gartner vice president and senior analyst. “Proof not only
delivers a highly accurate portrait of performance attribution, it enables companies and employees to transform time-based compensation approaches to fully governed impact- and value-based structures, much like sales or other roles with significant performance-based pay. At the same time, Proof provides companies with a clear, modern basis for assessing new compensation models for roles that are structurally necessary but that create less business value. With this announcement, Proof has demonstrated yet again how powerfully unique it is in today’s marketplace.”
“Workplace surveys repeatedly show that workers want to know that their time and effort has real meaning and significance,” Stouse continued. “This is equally true for companies – employers need every team member to understand how their individual performance correlates across time with the success of the larger group or company. Today, the need for greater transparency continues to intensify dramatically. Competition for talent is at a fever pitch. Demands for equal opportunity have never been more urgently expressed. Proof opens the door wide to far more equitable compensation models that are tied to a person or firm’s contribution to business impact and financial value creation.”
Proof P/360™ is the logical extension of Proof’s core computed attribution capabilities. Tom Bishop, the company’s chief technology officer, said: “Customers have been using Proof Analytics to compute marketing and PR attribution across a wide range of activities, programs, channels and outcomes. The next logical step was to give individual team members the ability to compute the relationship between their performance metrics and those of their colleagues and managers. Proof has integrated this capability into our Proof Exchange data federation architecture so that the upload of individual performance data is part of the onboarding process, providing each team member with the immediate opportunity to compute their short-, medium- and long-term contribution to their team’s performance. Proof then capitalizes on the network effect to extend these analytics across teams and companies, ultimately computing the personal contribution of each individual to organizational performance.”
451 Research analyst Keith Dawson recently wrote in a report, “Proof…reaches across organizational boundaries to encompass an entire ecosystem of employees, partners and vendors. By (networking) data in Proof, people with different roles can connect their activities and understand what levers to pull to ensure particular outcomes. This has the potential to collapse the barriers between sales and marketing, as well as marketing and C-level decision makers, technology buyers and users, and between a company and outside partners and agencies.”
“Proof is transformational, not only for individual employees but also for contractors, go-to- market
partners and resellers, and professional service providers,” said Tom Schodorf, a senior advisor to Warburg Pincus and board member for Rapid7. “Proof enables everyone – individuals, teams, managers, organizations, and the company as a whole – to understand individual and team contribution in context,including time lag. By computing role-based attribution in Proof, organizations can align, evaluate, compensate, promote, bonus and retain team members based on the amount of impact and value they actually create. As a long-time sales leader turned board member, it’s clear that Proof uniquely answers the big questions both companies and workers have had about the meaning and significance of individual performance to larger questions of business impact and financial value.”
“For years, companies and high-performing employees alike have wanted a more equitable approach to compensation, moving away from time-based approaches to an impact- and value-based system,” said Christopher Engman, chief revenue officer for high-flying Swedish heat energy company and Proof customer Climeon. “Bottom line, the more market impact and financial value you create, the higher your compensation can and should be, just like sales people are commissioned today. Before Proof, there was no way to really do this consistently and equitably. Proof is helping us understand what performance really is. It’s not just about individual effort. It’s about seeing an individual’s networked contribution to other people’s efforts, and then getting very clear about their meaning and significance – the ‘ripple effect’ of those efforts on the larger organization and its business performance. This is particularly critical when a company is focused on longer-cycle mega-deals that require the collective contributions of many different people and teams over a sustained period of time.”
“No man or woman is an island, and performance is always about our contribution to something greater than ourselves,” said Diane Kegley, chief marketing officer at Proof. “We’ve all repeated that mantra, but the reality is that most companies still can’t tie one individual’s performance to the larger organization’s goals and objectives, nor do they understand how an individual’s performance contributes to the success of their colleagues. Even more sophisticated companies usually fail to factor in the impact of time lag on recognized performance. Proof uniquely solves this problem.”
©2018 McKinsey & Co.: McKinsey Quarterly: Linking Talent to Value, April 2018
Delivering award-winning business analytics that everyone can use, Proof enables every employee and every team to prove their contribution to business value. Marketing, CSR, HR, communications, and consulting firms are using Proof to quickly forge alignment to business objectives, compute their respective contributions to business value, and showcase their financial ROI. www.proofanalytics.ai
Diane Kegley (Pacific Time)