The Triple Bottom Line is a More Effective Tool to Evaluate Hanes Panty-Hose than Social Enterprises

I have long felt that there is massive confusion about the how the social mission and the bottom line profitability of a social enterprise relate to each other.

To me it’s very simple.

Any self respecting social enterprise should build the social mission into the vision and mission of the enterprise, and then forget about it- the rest of the time should be spent on making a profit.  If the mission of an organization is to deliver safe drinking water to people without access to it, the act of delivering safe drinking water to customers at an attractive price has a profound built-in social impact. The same is likely to be true for a company delivering eyeglasses at an affordable price to customers who need them. Massive data collection on triple bottom line impacts diverts time and money from the most significant challenge- earning attractive bottom line profits.

Profitability is the most direct path to achieving scale, which carries its own profound social impacts with it. Delivering safe water to a hundred million customers who need it has a much greater social impact than reaching ten thousand customers. Profitability brings with it access to much larger pools of investment funds than the subsidies required when profitability is not reached. Of course, it is useful to collect some basic data verifying the positive social impacts and ensuring that the company’s activities are environmentally neutral. But if the social impact is built into the mission, the company should then turn to the most significant activities that correlate with scale- making an attractive profit!