What you need to know:
- The true measure of the success of a business is its impact on the wellbeing of people.
- The world today is moving towards cross-industry and cross-sector collaborations.
For the typical entrepreneur, profit is the main motive. This, after all, is the presumed reward for taking on risk.
The bottom-line often keeps executives awake at night. Progressively growing profits and keeping shareholders happy with handsome dividend payouts is the ultimate measure of how the business is doing and, by extension, how effective the leadership is.
This is the way we have always looked at and evaluated business. Not anymore.
Profit, on its own, no longer offers an accurate measure of the success of today’s business. It is an insufficient measure that does not give the full picture of the state of a business.
Impact is actually the new measure of success. Focusing only on profit without considering a business’ positive impact is outdated.
The true measure of the success of a business is its impact on the wellbeing of people and the planet. Wellbeing is the ultimate measure of success.
Social and environmental impact can no longer be ignored. The business model of the future is one that is keen on not only maximising profit, but also positive impact that benefits people and the planet.
Business has to take the lead in prioritising an inclusive economy, where enterprise plays a role in promoting the greater good, broadening prosperity and tackling inequality.
In the business environment today, massive prosperity and technological innovation notwithstanding, globalisation continues to intensify, leading to complex global issues that have negatively affected society.
This ranges from massive environmental depletion and degradation due to unsustainable extractive practices without replenishment, as well as humanitarian crises of unemployment to a litany of social ills such as crime and substance abuse, among others.
In East Africa, for instance, access to water and sanitation, as well as quality education and healthcare services remains a challenge to significant sections of society.
Countries within the East African Community bloc continue to grapple with these and many other challenges that stand in the way of delivering prosperity and better quality of life for all East Africans.
So gigantic are these societal challenges in East Africa, and the rest of the world, that it calls for urgent and sustained attention from different actors – and not just the governments as it was previously presumed in days gone by.
The world today is moving towards cross-industry and cross-sector collaborations and partnerships to make life better.
This has seen the thinking behind global initiatives such as the Sustainable Development Goals (SDGs), which are hinged on partnerships in addressing the world’s most pressing challenges.
Thus, it is critical for business in East Africa to consider its impact on society and the environment. Already, there has been an emergence of environmentally and socially conscious enterprises, which has been further catalysed by a variety of factors.
Research has demonstrated that paying attention to impact actually translates into higher financial performance.
Already, the Triple Bottom-line is increasingly gaining currency. It is all about people, profit and planet. This has seen the sustainability agenda continue to gather steam amongst companies across the world, including East Africa.
Companies such as Safaricom and KCB have gone a step further to publish annual sustainability reports outlining their social and environmental footprints.
Only recently, three East African firms were recognised amongst “Best for the World” list that is issued annually by B-Lab, a global not-for-profit organisation that promotes business as a force for good, by aligning the interests of business with those of society through assessment and certification.
The “Best for the World” list is made up of the top 10 per cent in different categories that are generating profit while minimising harm and seeking to maximise the positive impact of their businesses.
Instead of limiting negative externalities, they actively and purposefully seek a regenerative economy by operating their businesses in more thoughtful and rigorous ways.
These are enterprises that strive to use business as a force for good: good for workers, good for communities, good for the environment.
They redefine success in business by competing to be not just the best in the world.
Mr Pallazi is an entrepreneur and B-Lab Ambassador