Performance Drivers: a Disappointing Read

I would like for finance people to think beyond the typical “profit is king” that we’ve had for the last 40 years. Yes, you need to be profitable in order to have a business surviving long term but if you just look at profits and ignore things such as environmental or social impact, then the business could be causing great damage to the detriment to long term survival of society and eventually the business ecosystem. We all should have learned something over the last two years.

In LinkedIn, I read a lot of posts/articles and one popped up in my feed about how finance should know what are the performance drivers of a successful business. I thought this would be a very interesting topic and it was – initially. But then the author went on and tacked on profit as above everything else and he lost me because that is what businesses have to pursuing over the last 40 years to the detriment of society. Great Resignation? That’s probably part of the issue. Climate change? Yeah, profit took precedence over the environment. Diversity? Very related to how profit seeking overrided treating employees with respect and dignity. Income inequality? Again, profit focus squeezed wages.

And so on and so on and so on…

I looked at the author’s diagram of performance drivers and no where in the diagram was there anything related to the environment, society, employees. There was just a glancing reference to customer satisfaction. Leave those things out and they will be ignored by the operational managers. We need to add in something about environment, society and employees so that executives start thinking about the impact of their actions on the broader business ecosystem. For 40 years we have ignored those elements and we are where we are because of the single focus on profits.

I had high hopes for that article but then I left with a bad taste in my mouth. Blegh! I wish finance would start re-thinking this stuff.

It’s nice to see PWC, KPMG and Accenture showing posts on LinkedIn about ESG (environment, social and governance metrics, diversity, and sustainability). I’m hoping that continued conversation from these consulting firms will start to move the thinking of financial leaders toward encompassing more than just profits because finance bears a lot of responsibility for the damages we see in society today.