Consider the triple bottom line

Entrepreneurship Matters
Dr Kudzanai Vere

In line with the provision of solutions to current social-economic challenges facing the generality, entrepreneurs realise profit as a reward for their investment and the risks involved in the entire process.

In addition, real entrepreneurs look beyond the horizons into the future as they seek to create generational businesses which stand the test of time.

Similarly, sustainable entrepreneurship goes beyond the profit element into issues of people and the planet. The additional two Ps are the works of John Elkington who coined the term “triple bottom line” as a challenge for business leaders to rethink capitalism. He challenged the business community to expand their thinking to include all the various stakeholders and the well-being of the planet as outcomes of their operational activities.

The inclusion of people and planet as additional key results areas signifies business and entrepreneurial maturity. The planet and people are critical areas that determines how long an organisation will stay in the industry.

Fly-by-night organisation are neither worried about the satisfaction of their various stakeholders nor the planet as they narrowly pursue their profit motive. Sustainable profits are a result of doing all these other things right.

This article will look into the triple bottom line framework and its importance in measuring organisational performance.

Focus on profit as the main outcome of business activities has long-term sustainability challenges thus the call to consider the triple bottom line which emphasises the consideration of the planet, people and profit as key business result areas (KBRAS).

People

People take various forms in any business setup. They come as customers, employees, shareholders, suppliers, pressure groups and compliance bodies. Satisfaction of customer needs is central to the existence and subsequent survival of any form of business.

Without customers, there are no businesses to talk about and as such there must be parameters to measure customer satisfaction. Dissatisfied customers have a tendency of withdrawing their support to the organisation a move that threatens organisational performance and sustainability.

Similarly, the internal customers should be equally considered as they make things happen within our organisations. Without employees, your organisation will not do that much and it’s important to make sure that as we celebrate profits, our employees are also taken good care of.

To continue getting profits, this important stakeholder must be satisfied and well looked after in various aspects including salaries, health, and continuous improvement.

Suppliers of the inputs into our operating activities fall under the people category of the triple bottom line framework and some form of measuring stick must be put in place to see how successful are we managing them. Failure to succeed on the suppliers’ front means nothing to trade if you are in the goods industry.

Shareholders on the other end will always be continuously checking on whether their equity is increasing or is still safe. Return on investment to shareholders is their priority and efforts must be put to make sure that their equity improves.

The same shareholders must be educated on the need to religiously be taking cognisant of all the other Ps for they are equally important factors that threaten business continuity if left unchecked.

We do have other stakeholders such as those in the compliance and pressure groups that equally affect the way we operate our business and success measures must be put in place to cater to them.

Institutions that follow the triple bottom line framework always think about the impact of their actions on all the people involved in the entire value chain. Such organisations have satisfaction standards for every stakeholder within their matrix. They have a culture that every employee from the bottom to top respects.

Planet

Sustainable development goals — SDGs 13 (Climate action), 14 (Life underwater) and15 (Life on land) put emphasis on sustainable planetary action that everyone must consider in whatever they do. As we operate our businesses, it is imperative to be considerate of the planet for all activities, business or otherwise depends on the planet.

Triple bottom line companies thrive to reduce and at best eliminate their ecological footprint. Such organisation have an understanding that going green is more profitable in the long run. A consideration of the entire life cycle of your actions and the appreciation of the true costs of these to the environment makes you understand the importance of taking a conscious and responsible approach to the environment.

You might look at how illegal miners destroy land in the name of extracting whatever mineral they want, massive degradation. Their focus is on the now and not in the future.

Such kind of instant gratification motives are not sustainable in the long term.

We have those whose businesses entail the emission of dangerous gases into the air. What measures have you put in place to mitigate these as a key result area? There are those who emit dangerous substances into the water bodies. What are you doing about it?

There are issues of the general maintenance of the operating environment that must be set as a standard. The planet is an important and indispensable P that must be part of the key results areas as we measure organisational performance and ultimate success.

Profit

Profit is the financial bottom line that most companies get and always report on. To the ordinary business person, the other Ps are not of essence to them as they fall short of their long term impact they have on their profitability.

Ordinarily, profit is the residual value left from the sales revenue after taking care of the cost of sales and all the expenses of an organisation. But within the triple bottom line framework, profit must also include even the incremental satisfaction on customers.

Without taking great care and consideration of people and planet, the monetary profit we get is not sustainable for it comes as a result of taking care of all the processes, procedures that borders around the other Ps.

Conclusion

In as much as it is important to focus on the financial profit as a measure of organisational success, it is sustainable to consider planet and people as these brings with them the issue of sustainability in the whole measurement matrix.

A consideration of the triple bottom line as espoused in the sustainable development goals is important as you seek to measure your organisational performance.

Determined to engage, inspire and transform generations.

 

 The writer, Dr Kudzanai Vere is the Founder & CEO of Kudfort, Transformational Mindset Institute, Premium Business Network International and the Institute of Entrepreneurs Zimbabwe. He is an entrepreneur, author and transformational speaker in the areas of entrepreneurship and personal development. The transformational speaker have trained more than 5000 entrepreneurs globally in the areas of innovation, organisation development, practical business management and ideation. You can contact him on +263719592232 or email [email protected]