Beyond ‘Profits-Only’: 3 Trends That Will Affect Your Bottom Line
Global trends are like a river. Sometimes they are powerful, sometimes they are weak and sometimes they are so mellow a business can glide along like it’s on a leisurely, summer afternoon pontoon boat ride. But right now there are three big, scary trends that are not going to be leisurely.
1. Resource Roulette. The stress that global supply chains are under is making resource availability and access precarious and unpredictable. This, in turn, makes it difficult for businesses to set prices, determine shipment dates, establish baseline costs, or create just-in-time delivery timelines if those conditions exist. If energy costs fluctuate wildly, if product shipments are held up thanks to global unrest or catastrophic weather, or if resources needed for production dry up, this creates chaos and affects the bottom line.
Coca-Cola is a soft drink; its predominant ingredient is clean water. If the company that makes it doesn’t have access to clean water, it can’t produce as single can of Coca-Cola. No clean water results in no Coke. Some southern states have had severe drought conditions for the past several years, a condition being echoed around the globe. Resource roulette, however, extends beyond clean water.
Many global fisheries are depleted. Fishery depletion may not affect every business directly; many may never even think about global fisheries. But fishermen, restaurateurs, boat manufacturers, and those providing transportation to fish markets or any other global connection to that industry will be affected. The world has always been one globally connected biological ecosystem; it is now a globally connected economic system as well.
2. Amped Expectations. Consumers want their products to be quality, affordable and readily available, but they have now extended product expectations to the actual company itself. They want the companies they do business with to be responsible for how they treat the environment, their local communities and their own employees.
Consumers worldwide have a hunch that 7 billion people can’t survive and thrive doing business the way its been done in the past. As a result, they’re demanding changes in the products they buy and the companies they choose to do business with.
3. Global Connectivity. Communication in the 21st century is decentralized, personal, fast, cheap and capable of becoming exponentially viral. For businesses, this connectivity is a blessing and a curse. The blessing: Businesses can connect directly to customers all over the world quickly, easily and inexpensively. The curse: Those same customers can do the same thing if they’re not happy with a company’s performance, and their negative impact can grow exponentially and harm a company’s reputation.
In the modern world, reputation harm can mean financial catastrophe for companies. If a company is doing a poor job according to the customer, in a matter of minutes the customer can shoot a complaint video, start a Facebook page, share a Tweet, and the bad news is everywhere.
Navigating the Waters
The best hope to navigate these treacherous waters is to reorient a business focus from a “profits only” bottom line approach (which no longer meets the needs of shareholders and stakeholders) to a “triple bottom line: a people, planet and profits” approach. Why? Because it meets these three trends head-on. Is this approach easy? No way. Is it important? Yes. Will it succeed? Probably, although there are no guarantees, but there’s no guarantee that any business strategy will be successful. To do nothing almost guarantees failure; the trends are too huge.
Owners can get started by asking a simple question: “Is this business decision good for 1) profits, 2) people, 3) the planet?”
Many companies have already begun moving in this direction and it’s paying off for their “bottom line” profits. If a business is going to ride the rough waters in the 21st century, it must integrate sustainability into the way it does business. It’s what consumers want, and it’s the path for long-term business success.