What’s the bottom line?

I got rather annoyed when I spoke to a friend about a situation with an organisation and he responded – “all organisations think about these days is the bottom line” (referring to their financials). “Well what they think is the bottom line is not the bottom line”, I angrily retorted.

With the energy price increases I’ve since heard a lot of conversations during which it is said that the primary focus of business is to make profit for its shareholders. This has got me thinking as I’ve always believed that the purpose of business is to provide goods and/or services i.e. to add value and to make a profit from doing so.

At the same time I must confess that I’m yet to make my first million. Some may say that is due to my perspective – I believe it’s just a matter of time.  I very much believe that there should be a just return for the value that is added. I’m not a socialist of some kind. I’m a capitalist but I don’t believe that capitalism should or needs to be exploitative in any way.

This reflects a concern that I have with Corporate Social Responsibility (CSR). You may have organisations that do everything possible to maximise their profit. Paying staff and suppliers the bare minimum; employing unpaid interns and saying they are doing young people a favour; and charging customers the absolute maximum they possibly can with no regards to affordability. At the same time they may have a small percentage of their budget set aside to give back and do good in society. Many a time really just undoing a little bit of the damage they have contributed to in the first place.

It’s like the travel offsetting schemes that say to protect the environment we shouldn’t travel by air but if you do you can donate money, which will be used to plant trees on your behalf to offset the carbon dioxide emissions that you have contributed to – appeasing the conscience.

To my mind, if you act with integrity, offer good value goods and services at reasonable prices with due regard to all your stakeholders – be it employees, suppliers, producers or what have you, then you have acted responsibly as a corporation.  Even without viewing things from a CSR perspective, I strongly believe that the way you treat people is or will eventually become the bottom line.

Fundamentally if you treat the people that work with you well they will be better engaged in the way they work and more effective in the way in which they carry out their jobs leading to savings and ultimately increased profitability. I believe this is applicable even if your organisation is doing well – you would ultimately do so much better if you treated people well. I once taught at a college that didn’t pay staff anything for time spent preparing lessons. If on those basis the staff used the minimal amount of time preparing, the students would not get the best input from staff and this would impact on their ability to achieve. I say if because most staff typically aim to put in the best anyway. At the same time the school had high staff turnover and was struggling to find staff. Think of the cost of this both in financial terms and in terms of its reputation.  The College’s reputation ultimately having a knock on impact on its ability to recruit students to the institution.

I believe that customers are becoming more savvy and aware. Choosing not to buy products from organisations that thy see as unethical and shopping around for the best possible deal (sometimes there’s a bit of a contradiction here though)

So to me it’s ultimately not so much the figures on paper that determine the bottom line but rather the people, who both buy the goods and services and help to create them.

And that’s the bottom line!


Susan Popoola runs Conning Towers Ltd, an HR organisation focused on Talent Management and HR Transformation and Engaged For Success a Social Enterprise. She is also the published author of Touching The Heart of Milton Keynes: A Social Perspective and Consequences: Diverse to Mosaic Britain. She is also Winner Women4Africa Author of the Year 2013

Copyright 2013. This document is the specific intellectual property of Susan Popoola. Content may not be reused or reproduced without the specific permission of the owner or a reference to the source. Opinions may be generated

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