How to achieve impactful growth for your business
Going beyond the bottom line enhances company sustainability
Historically, the concept of healthy business growth has been defined by rising revenues and profits, an enlarged market share and expanding production. All of which tend to translate into happy shareholders, who watch such factors drive the value of the company—and their investment—higher.
Increasingly, however, business leaders are finding that corporate math based simply on traditional measures can prove hollow.
More specifically, allowing for sustainability and consideration of numerous stakeholders in addition to shareholders is gaining traction. Many have found that without weighing the environmental, governance and social impacts of its growth, a company’s risks can compound. Quickly.
Yes, there are some who scoff at such non-traditional business measures, but before you join them, consider two notable factors:
The largest cohort of today’s workforce, the millennials, has indicated more interest in working for companies that balance purpose and profit than for those that simply offer large paychecks.
The ranks of venture capital funds that have become Certified B Corps, a designation that reflects a for-profit company’s commitment to stakeholder-based capitalism, continue to swell. In fact, three Colorado-based firms—Colorado Impact Fund, Foundry Group and Greenmont Capital Partners—earned the designation in May.
B-ing mindful is good business
The B Corp designation hinges upon a company’s performance on the B Impact Assessment, which is maintained and promoted by the non-profit B Lab. The extensive assessment explores a company’s initiatives, impacts, outcomes and results within the following areas:
Environment—the impact of a company’s business, products and services on the global ecosystem, including its use of raw materials, its means of production, its supply chain and distribution channels (as relevant), as well as how its products and services directly help or hinder the environment
Workers—the company’s culture, from compensation, benefits and growth opportunities offered to employees to enterprise-wide engagement efforts and ownership opportunities
Customers—the outcomes resulting from the business model—how the company’s products and services help individuals or organizations working to support underserved communities or resolve broader societal or environmental problems
Community—the company’s behavior with regard to community service and charitable giving, as well as its business focus on social issues
Governance—the company’s DNA—how it’s run, how management holds itself accountable and the transparency around all of the above
In all, the B Impact Assessment provides a holistic look at how a company operates beyond traditional financial metrics, and offers critical insight into the business as a going—and growing—concern. Additionally, the investment world is increasingly adopting similar analysis to examine what some call pre-financial measures, or elements that will likely impact the top and bottom line, but haven’t yet blossomed in traditional financial statements.
Think about it. Poorly behaving companies that negatively impact any variety of stakeholders—whether it stems from wasting energy or water, treating employees shoddily or boardroom hijinks—face increased risks. Because if any such factors become public, any growth trajectory can quickly reverse course.
What’s your company’s impact?
Every company, from small service firms to large manufacturers with multiple inputs, generates ripple effects upon the environment, its immediate community, its customers and the employees it relies upon to generate returns for investors. The concept of impactful growth ties together all stakeholder groups and in doing so, has matured beyond simply placing a recycling bin in the break room.
Of course, different companies find affinity with different components. Yet for leaders looking to plot a path of corporate longevity, weighing multiple pre-financial aspects is a valuable exercise. Plus, it’s easily accessible and free, whether you use the B Impact Assessment or its abbreviated sibling, the Quick Impact Assessment.
Both versions of the Impact Assessment will compare your results with broader averages, but don’t put much stock in the scoring, especially in your initial go-round. Instead, focus on areas in which you do well, spots that could use some help and the baseline you’ve established to gauge future improvements.
Ultimately, by identifying and addressing opportunities and risks, you have the potential to raise, in a sustainable fashion, the long-term value of your company to all of its stakeholders, from its smallest supplier to its largest investor.