Most businesses create accounting systems to capture and report financial data. Using financial data, a company can and should develop benchmarks and goals for assessing financial success and progress.
While the financial bottom line (net income) is always important, I wouldn’t recommend leading a company using just this metric as a guide. Most business leaders have a variety of financial metrics on their dashboard including sales, profit margins, efficiency ratios, liquidity ratios, and more. All of these are designed to help the business leader safeguard the organization and drive profitability.
What is missing from their dashboard are the non-financial metrics of a sustainable company.
So how does a business leader improve the people and planet portions of their triple bottom line (TBL)? By using a similar approach to capture and report on people and planet data. What is missing from most accounting systems are the tools to capture and report non-financial data.
You know the two related sayings: “We measure what matters.” And, “You can only manage what you measure.”
On the environmental side you must create systems to track energy, water and material usage as well as waste steams including garbage, recycling and greenhouse gas emissions. These can be as simple as writing them in a log or tracking them in a spreadsheet.
On the people side you can use metrics such as average pay, employee turnover, workplace democracy, human rights complaints, highest:lowest paid ratios, educational opportunities, employee well-being investment, your service to the larger community, etc. Whatever you deem important to your success and strategy should be measured, monitored and reported on.
The important thing is to create the systems to capture this data just like you create systems to capture financial data like sales. Once you begin to capture TBL data, you’ll soon be innovating your way towards a sustainable business.
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