Decode Impact for the Next Betterment

Principle 08 Decode Impact for the Next Betterment

Most of the time, when asked about the indicator of business success, the answer often lies in a financial context because it seems to be clearest and easiest metric to measure. Whether it is Return on Invested Capital (ROIC); Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA); or Compound Annual Growth Rate (CAGR). In the end, however, we have to admit that even though a high annual income and profit may create satisfaction for shareholders or the business itself, it does not guarantee that other stakeholders will feel the same way. Besides, the more they are aware of how profitable the business is, they may even demand that businesses provide goods or services at reduced rates.

It is not surprising to see most businesses evaluating their performance based on numbers alone. Whenever they must measure their “betterment status” in other dimensions apart from economics - for example, better quality of life or better environment - they are required to answer how this status impacts income and profit. Although it is possible to create positive impacts that will lead to real awareness, the business’s main stakeholders - especially shareholders - still demand clear calculations relating to profit generation as reference for their investment. With such ambiguity, every business ultimately decision reverts back to monetary factors. Apart from having to find unusual strategies that will help them succeed, businesses nowadays must also design new ways to measure that success. So, what are the criteria businesses should use to measure success?

What businesses must do to connect the aspects they prioritize, with the occurred success is to decode the value system into a parameter of success to reflect the positive impacts that show that businesses care about the impact at the goal level, and not just their image. There are various indicators as tools to help businesses develop toward their bettterment status, where it is a competition with themselves, and not with other businesses. BRANDi has elevated the materiality matrix to a bettereality matrix to create an index for customers with an important aim to support strategies for creating net positive impacts based on pragmatic development and to reflect management approaches that are connected to the value creation process. In the end, businesses will be able to effectively shift from a single bottom line to the Triple Bottom Line.

Principle 08 in Business as Unusual explains that deciphering success in an era where the world of business is unusual is essential for success now and in the future. No matter how high the competition is, organizations must be able to determine what a “better corporate” looks like in their own version.

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