Can everything in life be converted into money? Can money buy everything?
Without fail what seems to occur almost on cue is individuals answer by saying: "Of course not, money can't buy happiness and love for example." But, I confess, behind those answers I often wonder whether these individuals actually think life would indeed be happier if bills were never an issue and they had full financial freedom.
So I press further. I remind them that when insurance organizations underwrite risk they are required to somehow quantify impacts and injuries in monetary terms--pain, distress, disruption, missing fingers, death. That in itself implies that everything can be translated into financial terms. That way all decisions can be made objectively, using money as the common denominator.
For the longest time, I have to confess that I was one of these individuals who felt that everything could be converted somehow to cash. I found solace in the convenience of the math and what seemed to be the most objective and logical currency to use for most decisions.
But that attitude has been changing for awhile now, and was totally transformed one particular day. What changed it was a conversation with a dear friend. She sought financial advice about selling her house. Her dilemma was that the real estate market was bad for a seller. She was also weighing that dynamic against the desire to move in with her chronically ill mother to assist her. We ran numbers for a while and in the end the discussion came to a screeching halt.
She proclaimed: "Stop. The money is not that important. I don't have that much time left with my mother. I am selling my home." In the end, money was not the most important driver of her decision.
For years, our traditional corporate models have focused solely on the bottom line, profit, profit and more profit?the "triple P." Decisions under that philosophy are based solely on economics and don't recognize that having a business staffed by happy, healthy people who live in a healthy environment are what make it sustainable.
The idea of a different "triple bottom line" was first introduced by John Elkington, author of "Cannibals with Forks," in 1997. I call it the "new triple P"--people, planet, profit. It measures the impact of your business in terms of social and environmental values along with financial returns. It grades the ethics of organizations on their ability to meet their present needs without compromising the ability of future generations to meet not only survive but prosper.
Initially, many companies naturally resisted this new notion because they saw the effort of measuring the new triple bottom line as a pure cost with no financial benefits. Indeed, organizations are troubled with their natural tendency to quantify the impacts to people and our planet. The solution can be just, at minimum, to consider these impacts and allow them to sometimes overweigh a purely financial decision.
Clearly, as seen with my friend's decision, it was impossible for her not to consider her social responsibilities in concert with financial impacts. And in some cases I hopefully imagine it would be no different for organizations.
JOANNA MAKOMASKI, the former risk manager for an energy delivery company, is a specialist in innovative enterprise risk management methods and implementation techniques with V3 Advisory Group.
September 15, 2010
Copyright 2010© LRP Publications