“Perhaps what you measure is what you get. More likely, what you measure is all you’ll get.” – H. Thomas Johnson
The belief that "what gets measured gets managed" has captivated leadership theorists for decades. But there’s a paradigm shift underway. As societal expectations evolve, some organizations are holding a broader perspective of progress.
Traditionally, companies have predominantly focused solely on financial performance for stakeholders. Today, there is a movement towards a "triple bottom line," which refers to three Ps: People, Planet, and Profit. The triple bottom line includes not just financial results but also the social and environmental impact of the organization’s activities. Let’s review each:
Profit: An organization’s success depends on its financial performance, or the profit it generates for shareholders. Business decisions are made to maximize profits while reducing costs and mitigating risk.
People: Traditionally, most organizations have focused on expanding shareholder value as a primary indicator of success. A triple bottom line includes creating value for all stakeholders impacted by business decisions, which includes customers, employees, and community members.
Planet: While businesses are the greatest contributors to climate change, they also have the greatest potential for driving positive change. Virtually every business has an responsiblity to reduce their carbon footprint.
The transition to multiple bottom lines calls for a long-term perspective, perhaps at the expense of short-term profits. Do you have a vision that goes beyond quarterly results? Can you escape the yoke of short-term thinking?
This type of long-term leadership isn't new to many Indigenous groups, who are used to what is called "seventh-generation decision-making," where people make choices based on how it will affect people for seven generations into the future. You can adopt a similar mindset in the way you approach leadership, guide your team, and help shape the culture.
Leading With the Future in Mind
Changing an organization’s metrics requires that the culture also begins to shift to value broader aspects of success, of what “we care about.” As a leader, you can encourage conversations to help your team — especially your senior leadership team — understand the need for and the benefits of a triple bottom line.
Take the People metric, for example. One organization we worked with recently wants to foster more cross-team collaboration. They are investing in training and development that equips people with better skills for true collaboration. However, when you dig a little deeper, annual performance reviews are all based on each individuals’ efforts throughout the year. Rewards are competitive and stacked. There are top performer awards, and the “bottom” performers are often weeded out.
This kind of compensation and reward system is antithetical to any movement towards creating a more collaborative culture. The reward system must be overhauled to measure team performance and success.
Of course, the transition towards broader metrics of success will require feedback and iteration. Nothing happens overnight. This is where two more Ps come into the equation: patience and persistence. You may encounter resistance and defensiveness. True leadership requires courage and taking a stand for a better future. Ultimately, organizations can play a role in making a better world.
Previously published on Forbes