A lot of people see business as a vehicle to make money and that all other factors are merely assets or liabilities to be subjugated to the primary purpose of maximising profits.

These profits are exclusively for the benefit of the business owner or capitalist who risked their capital to establish the business.

These ideas about money and business have been around for as long as we have been doing business by exchanging something we want for something the other party wants.

Exchanging goods and services is a very healthy activity that has driven massive increases in both the quality and length of life. Like anything, going to excess can take over with values compromised for the sake of greed. The focus moves from people and onto things. The game becomes less important to the score or bottom line of who is beating whom.

Don’t get me wrong, accounting is the language of how business keeps score, however, what our systems of accounting miss entirely is the people factor! There is no tangible measure of purpose.

Single Bottom Line:

Seeing the game as one of winners and losers, with the winner accumulating the maximum amount of money, is one lonely way to live where people are mere pawns to be used solely for the purpose of making money. They have little other value. Commodities to be exploited for profit. In this scenario, the interests of the business owners are opposed to the interests of the suppliers, employees, and clients. Greed is seen as good. The end justifies the means. The focus is on short-term profit.

Maximizing profit is the mantra.

Multiple Bottom Line:

The alternative view sees all stakeholders as having equal value. People are seen as most important. The purpose of business, from this viewpoint, is to create value for the stakeholders so all people involved can THRIVE. The interests of all the stakeholders are seen as complimentary. All parties can win. Greed is seen as counterproductive. The end does not justify the means. How you get “there” is important. The focus is on long-term value and sustainable profit.

Optimizing value is the mantra.

IMG_0090

A business can still be very profitable by optimizing value. Here are some of the benefits:

  1. Greater stakeholder engagement, including employees, investors, vendors, and clients.
  2. Enhanced customer loyalty.
  3. Less customer sensitivity to price.
  4. Greater long-term profits.
  5. Lower customer acquisition costs.
  6. Less sensitivity to competition.
  7. Enhanced reputation.
  8. Higher business valuation.
  9. The world is a better place.

Check out this awesome video by filmmaker Taylor Erickson:

© Andrew John Harrison. All rights reserved.