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From Pro t to Impact

Whilst there is nothing inherently wrong with the pro-
t motive, a singular pursuit of pro t without conside-
ration for other factors has led to a renewed interest in
alternative socio-economic models. It could be said that
early 20 century philanthropers like Rowntree and Le-
th
ver in the UK and Carnegie and Rockefeller in the US
started a movement where there was an increased focus
on wealth distribution and social welfare. However it
was in the 1970s that alternative philosophies really
started to emerge and they have developed to the extent
Imagem de Gerd Altmann por Pixabay ty (CSR) and Environmental, Social and Governance
that we now embrace Corporate Social Responsibili-
(ESG) reporting as business as usual. ese and other
models, such as Shared Value, have implied a rede ni-
tion of what it means to ‘win’ and be ‘successful’ and has
been termed the ‘Impact Revolution’.

When viewed through an Impact lens, the organisa-
tion is no longer seen exclusively as an economic agent
oriented to the return on invested capital. Rather there
are a broader set of success metrics that go beyond pure
nancial measurement: a philosophy of stakeholder
is philosophy of ‘shareholder capitalism’ brought we- capitalism.
alth and an increase in living standards to many nations
but resulted in managers being focused almost exclusi- Whilst still being concerned about nancial success, the
vely on cost, revenue (and hence pro t) as key valuation organisation is now oriented towards a broader set of
indicators. metrics. ere is a wider focus on employees, direct and
indirect, People and on sustainability and reduced en-
Success was de ned as ’pro tability’ in almost all orga- vironmental impact, Planet and on the way in which
nisations. ‘ ey are a great business, very pro table’ was organisations generate bene ts for the wider society,
an o en heard comment. Prosperity.

Additionally ‘success’ was de ned as executing your
chosen strategy. A long term strategy was put in place New Challenges, New Way of doing Strategy
and key metrics would inform a senior team about how How di erent is the world today in mid-2023 compa-
closely they were following their ‘plan’.
red to even 3 years ago?
Success was also about executing on a somewhat ‘static’
strategic plan, that was ‘signed-o ’ by shareholders se- How could anyone have imagined the Post-Covid
eking a steady and consistent long-term return on in- world? Or the world on the edge of a major con ict?
vestment; and company valuations were based upon the With spiralling costs and disrupted supply chains. e
accuracy of ‘delivering the plan’. point is that the world is di erent and organisations
have to manage a new set of challenges, or tensions, and
build capabilities to address these challenges.
A New Paradigm Of Success
Today, we are living in a radically di erent world to that
So, we see that the old paradigm is one of a focus on pro- of even 5 years ago. e pace of change is faster. e ex-
t, and a focus on delivery of a detailed static long term pectations of stakeholders and society are greater and
plan. In this paper we set out why we believe organisa- more diverse. We live in a VUCA world, it is volatile,
tions need to embrace a new paradigm, one where they uncertain, complex and ambiguous.
focus on creating value for a broader set of stakehold-
ers and one where they focus on realising value rather Organisations need to embrace a new way of expressing
than delivery of a plan. and managing value using the language of Impact and

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