If you are going to go to the trouble of building a business, you want it to last through the fluctuating winds and storms of the marketplace. After all, it takes time, effort, and focus to build a successful business. No way would you go through all of that effort if it was just going to be blown down before you reaped the rewards.
So what does long-term stability mean in business? Looking at financial profitability seems to be part of it. People are buying or they aren’t. You are earning more than expenses, or you aren’t. You are paying your bills, or you aren’t. There isn’t a lot of wishy-washy-ness about profitability.
But, at the same time, we all know that profitability can go up and down. We’ve all seen businesses be profitable one quarter and post a loss the next. It’s clear that stability can’t be based only in profit.
Unfortunately, for most people in business, profit is the only measure they have for growth and stability. This is like building a single stilt, and then standing on it. How long can you balance on a single stilt, and how comfortable is that?
In sustainable business circles, there is a concept known as the “triple bottom line.”
The triple bottom line consists of three areas: economic profitability– the traditional bottom line; community relationships– how your business relates, serves, and is nourished by the surrounding communities; environmental sustainability– how your business is nourished by, and nourishes, natural resources. These three together create a solid, sustainable, profitable business.
Does this really work? Or is this just a do-gooder strategy to try to get people to be “green” and “nice” in their businesses?
Let me give you an example. My wife and I saw a film recently “Broken Limbs: Apples, Agriculture, and the New American Farmer.” I think most of us know how hard the small family farm has been hit by large agribusiness corporations. Well, the new trend is for these farmers to take on sustainable practices and sell directly to customers and small retailers, giving quality and relationships instead of just the lowest possible price.
In this movie, one farmer, Gibbs farm in Washington State, had nurtured the physical environment in terms of sustainable farming practices, so that he wasn’t reliant on buying expensive machinery and chemicals. Stability! Profit! But, what’s more, he had also spent a lot of time nourishing the relationships in his business community.
In one scene commercial apple prices had been driven down to $21 a box. Gibbs told one retailer, with whom he had a trusted relationship- she knew he always delivered on quality, was good to his word, and, what’s more, they liked and respected each other as people- that he couldn’t honor that kind of price fluctuation. His price was $26 a box, or else “I might as well just feed them to my hogs.”
The retailer? I don’t remember her response word for word, but it was to the effect of: “Look, I trust him. He knows what it takes to operate his business, he knows his costs, and if he tells me he needs to sell them at $26 a box, I’m not going to argue with that. He gives us great quality, delicious apples that our customers have come to enjoy and expect- they aren’t going to quibble over the difference in price. They know they get what they pay for.”
Sounds to me like the triple bottom line creates a lot of stability, even when the larger market is in flux. A small farm successfully went head-to-head with a multinational corporation. Pretty impressive. And financial capital alone didn’t do it. Do you have relationships with your customers and suppliers that are built on enough trust that you can lean into them when you need to? Can they lean into you when they need to?
The bottom line- don’t make it a single. Make it a triple.
Keys to The Triple Bottom Line
• Take a look at all of your business relationships. How do you nurture them? What kind of investment, in terms of time, kindness, trust, goodwill, quality, follow-through, do you give to them? Try making up a “relationship” inventory- the top 10 or 20 people you have relationships with that are important to your business. They might be customers, suppliers, mentors, colleagues, whomever. Check in with your heart, and see which relationships could use more nourishment, and what feels like it would help.
• Try doing an inventory of your natural resources. Do you always just buy the cheapest paper, or do you invest in recycled? How do you use your resources, and where might there be waste? Here’s a hint: if there is clutter, there is probably waste- in resources and in effort.
• Beyond just relationships, what or who do you consider to be in your “business community?” What is the larger community context that your business resides in, and what are you doing to ensure that this larger community thrives, and helps to carry you along?
Books I recommend: Natural Capitalism by Paul Hawken, and Clearing Your Clutter with Feng Shui by Karen Kingston.
