Managing the Double Bottom Line
- April 6, 2010
- 2 Comments
Ted Leonisis of Newsweek writes about Google’s decision to stop filtering search results in China. In the first half of the article he focuses on this decision by Google and why it might be the right thing to do (for Google). He points out, rightly, that this type of gesture would be meaningless if you couldn’t “keep the lights on,” but if you have the financial means, then he makes a persuasive argument for Google’s decision.
His take: while Google has imperiled billions of dollars in future profit (in China), it has rendered itself “a happy company at peace with its values—and happy companies are more, not less, likely to continue being successful.” This statement really rings true with me. There are definitely companies that thrive on adversity and conflict, but companies in general seem to be more successful when their business and their values are in alignment. I believe this is true regardless of what your values are – if you run a cut-throat competitive business, it is best not to shy from conflict inside the four walls of your company. If you run a customer-service oriented business, its important to take care of your employees.
Ted also uses the example of AOL to illuminate: the mission at AOL transformed from bringing the Internet to everyone, to making the next quarter’s numbers… and many important business decisions were made that did not align with the higher calling of the company. The separation between a company’s actions and its mission can also happen when the mission is achieved (either by your firm or others) – for example, with AOL, Internet access for everyone has happened – it just isn’t AOL that made it happen after a certain point. For Microsoft, a computer on every desk is a reality – they’ve succeeded so well that they need a new higher calling to bind the company together.
Of course you can create motivation that lasts months or years around a competitive threat – no doubt the xbox folks could put their sites on Sony and Nintendo to motivate for years. But what drives Nintendo is, I would argue, a better core mission. If I had to state it, I’d call it “making gaming fun for everyone.”
Ted refers to his way of thinking as “double-bottom-line thinking.” If you expect these decisions to be non-capitalistic, then you misunderstand the logic behind his thinking. For example, he raised prices at Washington Capitals games because he wanted to build it into a franchise that could succeed – and lower prices would only further damage its financial ability to achieve success.
This “double-bottom-line” thinking is central to the way we look at bp3’s business as well: we really believe in improved business processes, this is not just a shortcut for us. We also focus on taking care of our team – because our team takes care of our customers. When friends and colleagues who run their own businesses ask how we can justify paying for benefits like health insurance or 401k matching, I ask them if they are sure they can afford not to. We believe we’re managing to our double-bottom-line, but it is something we need to revisit periodically to assess.
This “double-bottom-line” thinking is something that is not often weighed in process improvement projects, but perhaps it should be. If we just squeeze the process without considering how to make the net result better for customers, and to align the process better with the higher calling of the company, then we might be missing something terribly important. Aligning with both mission and the bottom line requires first, asking a question: “how does this align with our mission?”
(Note: there is a whole segment of BPM to address this, and other priorities, and how they feed into business planning: the business motivational model, or BMM )