Ah-Hah #2: Measuring ROI Beyond Money

I'm an idealist. I’ve always dreamed of organizations where employees grew happier and healthier because they go to work, and where communities prospered in an economy of peace. The development of the nation and of the wider community and business is intertwined. One cannot exist without the other (Hettiarachchi, R., Holdaway, L. and Gunduz, C., 2009, p.5).  I, like Smurtbwaite, believe “that business is not an end in itself but a means of promoting the good life of the citizens in the community” (2008, p.27). 

I didn’t know such organizations existed until the ATD Puget Sound Workplace Learning Conference. It was inspiring to hear that organizations are looking beyond a traditional financial view of ROI. 
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What systemic possibilities arise when companies examine ROI from an economic, environmental and humanistic perspective across intrapersonal, interpersonal, group, organizational, and community perspectives?

​This is the second ah-hah moment I listed in my original post about the ATD conference. The first ah-hah was about being explicit and not waiting to measure results. Today's reflection is this...

2) Companies are beginning to measure ROI beyond money. 

Berle and Means asked what the purpose of a business corporation is, and believed that it had to serve all of society (Smurthwaite, 2008, p.25). Throughout my praxis, I've learned that a healthy organization is one that relates economics and environmental sustainability to a culture of peace. The economic dimension of human life includes “utilization of earth’s resources to meet human wants and needs, with the work life of human beings involved in the processing of those resources, with ways of sharing what is produced through market and nonmarket mechanisms, and with the activity of consuming what is produced.” 

“The economics of a culture of peace involves living gently on the earth, in tune with the planet’s regenerative capacity; and that it also involves taking joy in labor and in sharing the fruit of labor – and pleasure of using those fruits in moderation” (Boulding, 2000, p.192). 

A healthy organization is one that takes into account the political and social environment in which it lives. “The political and social activities of  global business are changing in response to an evolution in the influence of civil society groups on corporate operations and the shifting expectations society holds about the responsibilities of powerful economic actors” (Haufler 2001, p.660). In this way a business promotes peace.

Haufler explains how: "…A firm can correctly manage the side effects of its own business decisions…a firm can do business with those attempting to manage conflict by selling or donating services, products or investments…companies can participate as partners in collective efforts to resolve conflict, either in league with other businesses or more especially with governments and civil society organizations…firms can engage in social investment and philanthropic ventures, addressing pressing social needs by donating cash, expertise and other resources…The private sector can provide, collect or facilitate access to information and communication between disputants or to the wider public…can conduct socioeconomic impact assessments of their own operations…participate in or facilitate the launching of multi-stakeholder dialogues, promote peace by making public appeals to the warring sides…provide the communication infrastructure that would facilitate information sharing" (2001, p.665).

What are these curious, idealistic organizations I'm speaking of? Here are three examples, DDOs, B Corps and the Shared Value Initiative. 

DDOs, Deliberately Developmental Organizations, are organizations with cultures explicitly designed to advance the mutual flourishing of the organization and its people.  Learn more about what a DDO is here? 

B Corporations measure a triple bottom line (people, profit and planet), and are on the rise in 41 countries and across 121 industries. There are currently 1,257 certified B Corps, 31 in WA state. ROI in these organizations looks at a triple bottom line measuring economic, environmental and humanistic impact. Want to see how your organization holds up? Try out an assessment. 

The Shared Value Initiative is a global community of leaders who find business opportunities in societal challenges. What kind of corporations are involved? Here's a few: Chevron, HP, Intel, InterContinental Hotels Group, Mercy Corps, Nestle, PATH, Rockefellar Foundation, and Verizon to name just a few. 

What does it look like when organizations begin partnering and collaborating with other businesses, nonprofit organizations, governments and citizens?  Cleveland, Ohio is an example of how taking into account an expanded paradigm of ROI, looking at multiple bottom lines, can be used to foster economic growth. 

In 2009, the mayor of Cleveland convened the Sustainable Cleveland 2019 (SC2019) Summit to bring together hundreds of people interested in applying the principles of sustainability to the design of the local economy. The SC2019 is a 10-year initiative to create a sustainable economy in Cleveland by focusing on a TBL-like concept. The city uses four key areas for measuring sustainability: the personal and social environment, the natural environment, the built environment (e.g., infrastructure and urban growth patterns) and the business environment. Each key area has six goals. At this point, specific measurement indicators have not been fully developed; however, the city is looking to create a dashboard that could be combined to create an index for overall project success. This dashboard would allow for quick year-to-year assessment in the SC2019 progress (Slaper, 2011).

What can leaders start doing to expand their paradigm of ROI?

1) Leaders must start: …facing differences honestly and creatively, understanding their full complexity and scope, and enabling those involved to move toward original solutions. Such leadership requires going beyond the powerful, primordial responses to difference that result in an ‘us versus them’ mentality. It requires capacities that many leaders have never developed, bringing to bear both personal and professional skills that turn serious conflicts into rewarding opportunities for collaboration and innovation (Gerzon, 2006, p.3).

2) Get to know the organizations in your city pioneering corporate social responsibility, triple bottom lines, and shared value initiatives. Take a cue from SVI: start seeing problems as opportunities. How can learning and development be seen as an opportunity rather than a cost?

3) Reflect on how you implicitly measure value. How do you determine if an investment you made was valuable? When you go grocery shopping, go on vacation, or go to a learning event, how do you assess if your investment was worth it? (hint - what you use to measure value should align to your values). 

4) Make a list of what you invest in any endeavor. You can invest time, money, physical space, attention, care... For each category of investment are the per unit values consistent? For example, do you value 1 hour at the office the same way you value 1 hour of alone time, or time with your family? Then, notice what investments you make the most, and which investments you make the least. Ask yourself the same questions for your company.

5) Practice applying a triple bottom line philosophy to your workday. How would you measure the ROI of your next meeting against economic, humanistic and environmental bottom lines?

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Boulding, E. (2000). Cultures of peace: the hidden side of history. Syracuse, New York: Syracuse University Press.

Gerzon, M. (2006). Leading through conflict: how successful leaders transform differences into opportunities. Boston, Massachusetts: Harvard Business School Press.

Haufler, V. (2001). Is there a role for business in conflict management. In Crocker, C.A., Hampson, F.O., & Aall, P. (Eds), Turbulent peace: the challenges of managing international conflict (pp. 659-675). Washington, DC: United States Institute of Peace

Hettiarachchi, R., Holdaway, L. and Gunduz, C. (2009). Sustaining business and peace: a resource pack on corporate responsibility for small and medium enterprises. International Alert.  Retrieved from http://www.unglobalcompact.org/docs/issues_doc/Peace_and_Business/Sustaining_Business_and_Peace.pdf

Slapper, T. and Hall, T. (2011). The triple bottom line: what is it and how does it work. Indiana Business Review. Spring 2011 V 86 No 1 Retrieved from http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html

Smurthwaite, M. (2008). The purpose of the corporation. In Williams, O. (Ed). Peace through commerce – responsible corporate citizenship and the ideals of the united nations global compact. (pp.25-54). Location: University of Notre Dame Press.