Dashboard Driving

I coined the term “dashboard driving” during the early 2000s to describe the intense focus by the financial departments on just the financial metrics of profits. Frankly, it was just shareholder, shareholders, shareholders. I dreamed up this metaphor where when you drive just using the dashboard of your car, you are not looking out the window to see whether you are going in the right direction, whether you’re going to crash or not, whether you are in good neighborhoods or not. Nor are you looking at the car’s occupants to make sure your kids in the back are not killing each other or whether your front seat partner is doing okay.

In other words, by just concentrating on the car dashboard, you are missing out on a whole lot of other very important information.

Same thing with businesses, thus the “dashboard driving” concept. The 80s, 90s, 2000s, 2010s were dashboard driving decades.

That may be changing now. First there was this Business RoundTable Council that changed the purpose of businesses from just profit maximization to stakeholder values. Then last week, I went to a webcast that discussed the rising importance of ESG (environmental, social and governance reporting) and the driver for this interest were the investors! That shocked me. I’m going to do a wait and see to see if this trend is real or just shallow signaling.

But if this is real, then this is great news. It means the shareholder creed may be dying. We probably won’t know until a decade or so from now, as I imagine there will be serious pushback from those who want things to remain the same.