Stern Stewart boasting a client list from the Fortune 500 is eagerly proselytising the wonders of EVA

Stern Stewart, boasting a client list from the Fortune 500, is eagerly proselytising the wonders of EVA far and wide. Two years ago, it embarked on a quest to bring the concept of TSR to all employees, including a 15-page booklet, titled, surprisingly enough, Employee Guide to TotalShareholder Returns.At a more sophisticated level, there is Economic Value Added, the progeny of management consultancy Stern Stewart, which has achieved a mantra-like status in the US. In one of the most direct and simple efforts, US household goods giant Procter & Gamble has taken the concept of total shareholder return as the platform for running all of its businesses, even at the shopfloor level. The NAO's Gavin Lidderdale says it is early days, but the aim is similar to the private sector: better, more informed measurement gives a more informed view of the value for money in any project, and of setting targets for departments and agencies. The upheavals in the public sector, for competitive tendering, the private finance initiative and the like, have all created a climate where better ways to measure performance and value for money are essential.

And they should set direct, simple goals which are readily understood, by investors, employees and any other audiences they have to construct a dialogue with.Nor is the debate confined to the private sector. Often the dips follow events like production problems - but where there is no evident explanation, management can then talk to employees to discover and try and sort out the problem on the shopfloor.Robert Bittlestone says instead of measures which rely solely on the financial information, companies should be trying to find measurements which relate more directly to their business. The employee simply ticks the face that best expresses how he has felt over the past month at work.It means Honda has a moving picture of how employee morale is changing, month by month. Once a month, employees are required to pick up a card as they report to work, fill it in, and drop it into a collection box.On the card are three faces: a smiley face, no expression, and sad. A few years ago, it introduced a solution for testing morale, on a regular, simple, and inexpensive footing. But measuring that has been of little concern to many businesses, while it has also often seemed too difficult to pin down.Honda, the car maker, was one company that saw it as critical.

They do exist: in the stakeholder society, all groups within a company's ambit - employees, community, shareholders, suppliers and customers need - can have measures linking success and objectives.For example, few would argue that good employee morale is an essential component of most successful businesses - ask any high-street retailer. For example manufacturers can track quality, productivity and speed of delivery, while service companies can measure how long it takes for the phone to be answered.But to be able to compare companies, we have to extract common elements for measurements. At one level it is, after all, a statement of the blindingly obvious: that chief executives and their directors should seek to create value for their investors, not destroy it. Inevitably, most of these initiatives have been spawned in the US. Robert Bittlestone, who helped establish the Foundation, says: "You would be surprised at how many businesses lack measures in areas of their business that are absolutely critical." He says, in many cases, it is "because it has always ticked along nicely, thank you, and it isn't until it is threatened that management realises it lacks sufficient information to support its decision-making process".The Holy Grail of shareholder value was the starting point for many new attempts to measure how companies create wealth for their shareholders.