The Financial Impact of the Government Affairs Team

Measuring ROI of Government Affairs | March 4, 2019

From speaking with Quorum users and other industry leaders, we've identified five strategies as the leading ways organizations are measuring the return on investment of government affairs. Read this blog to see how you can measure ROI by the financial impact of the government affairs department, or download our E-Book for all five strategies and explanations of how Quorum can help.

Measuring government affairs by dollars saved or earned through policy outcomes shows the clearest impact on an organization’s bottom line, but can also be one of the most challenging to accomplish. First, measuring the financial impact of policy outcomes typically requires the aid of the business unit to provide analysis of a given policy—something that isn’t feasible in every organization and may not be feasible if a team is deal with multiple issues a year.

Here are two examples of how organizations measure ROI of their government affairs teams by analyzing the financial impact of their work:

Example 1: Using an Excel Model to Calculate Financial Impact

One major manufacturing company uses a financial model in excel to calculate the dollar value of their work on a given policy. In the excel formula, they list each product that they sell and the cost of that product. This way, when a policy is introduced, they can determine how many products it will affect and calculate the dollar value of that policy on the business. Then, the organization sets a target as a percentage of the cost calculated by the formula for how much they are willing to spend in support or opposition of a policy.

Example 2: Partnering with the Business Unit

A major retailer partners with the business unit so that whenever a policy is proposed, the business unit will calculate the impact of that particular policy. For example, if there were a proposed policy in a particular state to allow liquor sales on Sundays, the business unit would determine the potential income of selling liquor on Sundays in that state, and the government affairs team then determines what resources it will contribute to engaging on that policy.

Best Practice: Get the Business Unit to Pay

The best practice for coordinating ROI of government affairs with the business unit is for the business unit to use its budget to pay for the services of the government affairs team to engage on a particular issue. After calculating a proposed impact of a given policy, the business unit can determine to what extent it wishes the government affairs team to engage and pay for the government affairs team to bring on an issue expert or grow the team to take on that policy.

Measuring ROI by Financial Impact with Quorum

While calculating the dollar value of a given policy requires the work of the business unit, tracking and prioritizing issues based on that calculated dollar amount is simple with Quorum. Using Quorum’s Issue Management function, map out the primary issues of your organization. Then, assign the relevant bills, regulations, tariffs or other policy priorities to each issue.

For each bill in a given issue, add a custom field for the financial impact of a given bill. Then, use Quorum Sheets to make a spreadsheet of bills with columns for the financial impact. By sorting from highest to lowest dollar value, your team can prioritize which policy priorities to spend the most time and resources on.

To see how you can organize your ROI measurement in Quorum, request a demo.

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