As the organizational strategic planning process has matured throughout the past few decades, the move from financial measures to a more holistic approach to organizational strategy and effectiveness has manifested itself in a number of ways. The balanced scorecard developed by Robert Kaplan and David Norton has provided a widely adopted framework on how to approach this type of complete view of an organization.
The triple bottom line company is trying to optimize across financial, social, and environment factors, and this is a far cry from the pure financial metrics that first drove strategic planning (and still does for many companies). As the triple bottom line movement has taken with various companies across industry, the balanced scorecard provides an interesting and highly aligned approach on how to address the the needs of an organization that has openly embraced the triple bottom line.
The balanced scorecard focuses on measures across knowledge and growth (i.e. people), customers, internal process, and finance. Approaching a triple bottom line organization with these metrics for strategic planning allows a company to focus on sustainable goals and measures within the areas of finance, social, and environmental optimization.
To outline some of the alignment I wanted to focus on the four areas of the balanced scorecard and how they can help a company achieve strategic success in support of the triple bottom line.
- Knowledge and Growth: This entails creating a culture that values information and appreciates that financial, social, and environmental factors are incorporated into every decision each employee makes.
- Customer: This involves creating value for the growing number of environmentally and socially-conscious consumers a company serves.
- Internal Process: This means managing resources, energy, and waste in the best way to support financial, environmental, and social milestones.
- Finance: By following the measures above to meet social and environmental needs the company can create long-term value and return to investors.
If these goals and measures across the triple bottom line can be used to motivate organizational effectiveness, there is great opportunity, and as Michael Porter has put it: “If corporations were to analyze their prospects for social responsibility using the same frameworks that guide their business choices, they would discover that Corporate Social Responsibility (CSR) can be much more than a cost, a constraint, a charitable deed – it can be a source of opportunity, innovation and competitive advantage.” ref
By combining the knowledge and growth, customer, internal process and financial measures of the balanced scorecard, organizations can begin to appreciate the intersection of economic, social and environmental factors that allow leaders to excel and lead to improved decision making that will keep the organization optimized in meeting its triple bottom line goals.