Illustration by Dan Page
Positive financial performance and a healthy bottom line are vital for the success of any small business. Yet, in today's landscape, businesses are increasingly held accountable for more than just financial returns. The concept of the Quadruple Bottom Line (QBL) acknowledges this shift, emphasising the importance of not just profit, but also social and environmental impact, as well as purpose.
I’m going to delve into what the QBL entails and how it can contribute to your business's success.
Traditionally, the ‘bottom line’ of a business referred to its financial performance, with Net Profit Before Tax (or EBIT, or EBITDA), positioned at the bottom of the Profit & Loss statement. However, as societal and environmental concerns have gained prominence, the concept of the Triple Bottom Line (TBL) emerged. Coined by management consultant John Elkington in 1994, it emphasised not only financial outcomes but also social and environmental impacts.
It comprises three key elements:
Profit: Reflecting the financial performance of the business.
People: Addressing social responsibility and fair treatment of stakeholders.
Planet: Focusing on environmental sustainability and conservation efforts.
Introducing the Quadruple Bottom Line (QBL)
While the TBL addresses how a business operates, the QBL extends this framework by incorporating Purpose. Coined by social commentator Ayman Sawaf, the QBL emphasises the overarching question of ‘why does a business exist, when making money is a given?’
Purpose: The Fourth P
In other words, Purpose represents ‘the why’ behind a business's actions, aligning with societal, environmental, and economic goals. By integrating Purpose into their operations, businesses can create meaningful impacts and foster sustainable development.
Here are some well-known examples of Purpose statements:
LinkedIn: ‘To connect the world's professionals to make them more productive and successful.’
Twitter (before it was X): ‘To give everyone the power to create and share ideas and information instantly, without barriers.’
Apple (originally): ‘To make a dink in the universe.’
Microsoft: ‘To enable people and businesses throughout the world to realise their full potential.’
Google: ‘To organise the world's information and make it universally accessible and useful.’
Queen Elizabeth II: ‘To devote myself to your service and the service of our great imperial family to which we all belong.’
Patagonia: ‘To save our home planet.’
Nike: ‘To bring inspiration and innovation to every athlete in the world.’
I leave to you to judge how closely their actions and behaviours match their stated Purpose.
Implementing the Quadruple Bottom Line
Implementing the QBL requires a holistic approach that addresses cultural, spiritual, and individual aspects within your business. This involves assessing why your business exists, when making money is a given, and then integrating it into all aspects of operations. Moreover, it necessitates measuring and quantifying the impacts of Purpose-driven initiatives across various dimensions, including cultural
identity and employee satisfaction.
Contexis, a company of which I’m an Associate, set out some years ago to measure the effectiveness of Purpose-driven companies. They partnered with Cambridge University to do this. In summary, they found that companies that are genuinely Purpose-driven outperform their competitors over the long term.
Raj Sisodia, David Wolfe and Jag Sheth carried out similar research spanning many years into US listed companies for their seminal book ‘Firms of Endearment—How World-Class Companies Profit from Passion and Purpose’. Their conclusions match Contexis’ findings.
Moving Forward with Purpose
Establishing Purpose within businesses requires a commitment to ongoing engagement and development. That’s an area in which I can assist.
In conclusion, the Quadruple Bottom Line underscores the importance of Purpose in driving sustainable business practices. By embracing Purpose alongside Profit, People, and Planet, businesses can not only thrive financially but also contribute positively to society and the environment.
Ultimately, integrating Purpose into business operations empowers organisations to
become agents of positive transformation, both within the workplace and beyond.
The B Corp and the Better Business Act movements are both very much aligned with
the QBL concept.
And actually, when I talk about ‘Love’ in business, it’s shorthand for the Quadruple
Bottom Line!
If you’d like to discuss bringing in the QBL to your business, get in touch!