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Oct 26 2017

The Triple Bottom Line Scorecard

 

 

Up until recently, the primary goal in business was profit and the most common tool to measure it was the P & L Statement.  However, changes in society are pushing business to redefine success and how to measure it.  Three converging forces have set the stage for a great makeover of our current business model:

 

  • First, the great recession made us realize that if we use old models we might end up right back where we are now.
  • Second, baby boomers are entering retirement age and are redefining what it means to be successful.
  • Lastly, a new generation of employees is demanding meaningful work.

 

We propose an expanded model that defines business success as a journey to significance.  We’re not alone in this desire to redefine success:

In Bhutan, the government measures more than just GDP (Gross Domestic Product).  They also measure GNH, Gross National Happiness.  Knowing happiness can be experienced differently for each person, they’ve developed a tool to measure several conditions within 4 key categories they feel encourage happiness: Sustainable Development, Good Governance, Cultural Values and Natural Environment.

 

In Maine and Delaware companies can be granted a B-Corp status. Like its cousins the C and S Corp., the B Corp designation is granted by the state corporations commission. The charter of a B-Corp is to add value or Benefit, to employees, community and the environment.

We’ve taken a step further by designing a process for individual leaders and organizations to take the Success to Significance Journey.   And we created a measure tool to match the expansive goal of reaching significance through supporting People, Profits and Planet.

 

We call it the Success to Significance Triple Bottom Line Scorecard.

 

It measures the individual, as well as interdependent, performance of the three pillars of significance. Here are the goals of each:

  1. People: To find and express individual purpose and thereby drive meaning into the workplace.
  2. Profit: To build a sustainable economic engine that provides a sustainable return on investment.
  3. Planet: To create healthy communities, leave a legacy and enhance our Earth

 

This tool is based on familiar banking terms.  There are deposits, withdraws and the bottom line.  People, Profit and Planet each have their own statement that looks like a standard P&L. Deposits are benefits, withdraws take away from the benefits and the bottom line is what is left over.

 

We ask employees, company leaders, vendors, and community members to assign a 1-100 rating on several line item conditions in the Triple Bottom Line Scorecard. We average out the scores and present a scorecard at the beginning of our work and another at the end to show progress.  Here is a very scaled down example:

 

 People Profits Planet
DepositsWage Index85Revenue70Volunteer hours60
 Training index70Accounts Receivable40Money spent in community programs40
 Flexible work hours50Other revenue40Recycling programs90
Total Withdraws 205  150  190
 Turnover rate30Accounts payable30Carbon foot print50
 Employee lawsuits20Variable costs50No community visibility60
 Forced overtime35Fixed costs30Vendor complaints50
Total 85  80  160
BOTTOM LINE 120  70  30

 

Leaders and companies that take the Success to Significance Journey don’t sacrifice Profit for People, or Planet for Profit.  Gallup’s recent study called the Economics of Well-Being, as well as other studies, shows that organizations can even be more financially successful if they set and measure goals that support their people, community and environment.

 

The new business model is one of interdependence, doing meaningful work and serving the needs of all business stakeholders on the path from Success to Significance.