Saturday, December 2, 2006
Welcome to The Double Bottom Line
According to Wikipedia, the Double Bottom Line is a business term used to assess the social and environmental impact of enterprises and investments. All of us understand that the traditional bottom line is used to measure financial performance. However, the second bottom line is emerging as an important metric as well. The second bottom line measures a firm's contribution to either the community or to the environment.
An encouraging trend is that customers and employees are beginning to place real value on a firm’s contributions to society. A select few companies (Whole Foods and Starbucks are icons in this respect) have a strong sense of social responsibility wired into their DNA. A growing number of other firms (The Gap and Apple are two prominent examples) are moving to (re)position themselves as enlightened companies. (in fact, both The Gap and Apple have long worked to be good citizens; The difference now is that their intentions have moved off of their "missions and values" statements and into their advertisingl; (more to coms on this.)
Most companies, however, view community service in the same way as they have for decades. Outreach is considered an expense, not an investment. Community Service is a luxury, not a commitment. And in the world of the three legged stool of Shareholders, Customers and Employees, Community is an extra piece of scrap wood.
The breakthrough thinking demonstrated by The Gap and Apple is powerful. They believe that a commitment to the second bottom line can improve their fiscal bottom line. They, among a few other firms, are emerging as the leaders of this trend. They have set the table for innovative marketing and product development, now with the dual goals of net income and net impact.
Future blogs will deal with why they are wise to have chosen this path. In the next blog, I will deal with why customers are placing more value on a companies with a sincere social commitment than ever before. And why this isnt a fad. In a future blog, I'll discuss how employees attitudes are different in a socially responsiblee company than in one that is not. And I'll pepper my blogs with as many examples, links, and research as I can.
Perhaps its time to turn that three legged stool into a four legged chair. Can you remember the last time you saw a three legged stool, let alone used one? Its time to put that one in the business relics exhibit, right next to the three martini lunch, the three piece suit, and the three day limit.
An encouraging trend is that customers and employees are beginning to place real value on a firm’s contributions to society. A select few companies (Whole Foods and Starbucks are icons in this respect) have a strong sense of social responsibility wired into their DNA. A growing number of other firms (The Gap and Apple are two prominent examples) are moving to (re)position themselves as enlightened companies. (in fact, both The Gap and Apple have long worked to be good citizens; The difference now is that their intentions have moved off of their "missions and values" statements and into their advertisingl; (more to coms on this.)
Most companies, however, view community service in the same way as they have for decades. Outreach is considered an expense, not an investment. Community Service is a luxury, not a commitment. And in the world of the three legged stool of Shareholders, Customers and Employees, Community is an extra piece of scrap wood.
The breakthrough thinking demonstrated by The Gap and Apple is powerful. They believe that a commitment to the second bottom line can improve their fiscal bottom line. They, among a few other firms, are emerging as the leaders of this trend. They have set the table for innovative marketing and product development, now with the dual goals of net income and net impact.
Future blogs will deal with why they are wise to have chosen this path. In the next blog, I will deal with why customers are placing more value on a companies with a sincere social commitment than ever before. And why this isnt a fad. In a future blog, I'll discuss how employees attitudes are different in a socially responsiblee company than in one that is not. And I'll pepper my blogs with as many examples, links, and research as I can.
Perhaps its time to turn that three legged stool into a four legged chair. Can you remember the last time you saw a three legged stool, let alone used one? Its time to put that one in the business relics exhibit, right next to the three martini lunch, the three piece suit, and the three day limit.
Subscribe to:
Posts (Atom)