#Ultimate pro fit how to#
And there is plenty of guidance for how to meaningfully measure non-financial or intangible performance, in general. There is plenty of guidance for how to measure ESG performance. Surely a truly balanced scorecard is one where the perspectives of every stakeholder affected by a company define success? ESG thinking can inform strategy design, to create true balance in the definition of organisational success.Īnd that truly balanced strategic direction can guide what the organisation measures, monitors and manages to pursue that success. We really need to move away from a singular focus and single measures of success. If human endeavours like business don't exist to make the world a better place, can we really judge them as successful? How can people enjoy the rewards of high profits when others have had to suffer to make those profits possible? ESG is one antidote to 'dollar addiction'. It borrows value from the future, and from other stakeholders in the business's operating environment. This short-termism does not create value. Child and slave labour in industries like coffee and diamonds are of course the extremes of this view, but it's still an attitude that many familiar companies and organisations have of the people who contribute their time, skill and effort.įrom a governance perspective, there are still many organisational leaders who are rewarded for short-term targets with (often obscenely) high financial bonuses. Get as much productivity as possible for the least amount of financial reward. So they become land fill.įrom a social perspective, that habit of calling employees 'our greatest asset' smacks of a company that treats people like equipment or property: maximise the return on investment. And no-one wants to reuse them when they can buy the latest and greatest for next to nothing. Electronic appliances, like toasters and video players and outdated laptop computers, often aren't able to be recycled. Success is not a number - it's not X dollars or Y customers - it's a measurement of VALUE."įrom an environmental perspective, there are still many companies that don't take responsibility for the life-cycle of the products they make, as it does affect profit. To help your customers, your co-workers, your employees, and your partners. The mission of business is to help people. And Fran Tarkenton, former American quarterback and author of The Power of Failure, says it like this: "Profit isn't and shouldn't be the mission of business. Matt Tenney agrees that profit is not the ultimate measure of success in his TEDx talk, Why The Best Leaders Make Love The Top Priority. Behaviour that has consequences which don't appear on the balance sheet. The problem is 'dollar addiction'.įor too long, it's been accepted as normal and right to put financial performance at the top of the scorecard, and focus performance dashboards around the financial KPIs.
And it can bring a more holistic and true balance to the measures that define ultimate business performance, in all sectors. ESG (environmental, social and governance) performance is a topic that's becoming more popular. Rather than profit, budget performance and revenue generation can blinker the organisation to the needs of other important stakeholders.īut recently there is far more pressure to change this practice of putting financial performance at the top of the KPI priority list. It's not just the for-profit sector.Įven in public and non-profit organisations, making financial performance the ultimate measure of success can cause problems (but probably less so than in for-profit companies). these are the costs that communities and the environment pay (now and in the future) to subsidise the companies' profits. These are the costs that don't make it into the companies' financial statements. When the waste products are flushed from the factory floor, they run off into nearby streams and waterways, and kill the aquatic life. The ammonia causes irritation and health problems to people. The ammonia from the chickens' waste products makes going outside unbearable when the wind blows in a specific direction. Aside from the birds' suffering, there are some very significant costs to local communities and ecologies. In many operations, chickens get about the size of an A4 sheet of paper to live their lives in. To maximise profits, these companies maximise the number of birds per square foot of space. My eyes were opened to consequences beyond animal suffering when I read about the mass-production farming of chickens, in "The Ethics of What We Eat" by Peter Singer and Jim Mason. Many leaders still believe that profit - or financial performance - is the ultimate measure of business success.
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