Workshop 4 Speaker Notes - Creating Community Margins
We understand how to measure financial margins, but we are trying to gain an understanding of how to measure the effect of our businesses on community well-being, or create community margins. Since we are at the beginning of this process, there is still much to develop and learn.
Triple Bottom Line:
- Economic Profitability
- Community Wellbeing
- Environmental Sustainability
All these together make a sustainable business. "All businesses are triple bottom line, some know it and some don't."
Focusing on Community Well-Being, the Primary Elements of a Triple Bottom Line Business:
- Purposeful work
Relationships: This comprises all relationships - customers, employees, the city, and your own relationship with your business.
Learning: This is our primary human capacity - we learn through play.
Purposeful work: The reason people do the work they do; making a difference
Health: Health and safety
Accessibility: How accessible is your work to the community?
The above 5 elements lead to yield in community well being.
What is community? How do we define it? (Name of the book about nature of community and who makes up the core (Tom))
- It is anything that has the sense of being larger than the individual.
- All businesses are living organisms and all businesses are communities.
- In a large group, a small number of people will be at the core of the community, the stewards of the mission (or seed idea). For example, in a community of 100 people, there might be a core of 10 people.
- When the core says there's something the community needs to work on, the builders will be the first they go to for implementation.
- Members at large
- The edge - The people on the edge are critical. They might be people who know a lot about the business and its mission, but are not part of it.
- Businesses exist in ecosystems. For example, your business may exist within the city ecosystem as well as within an industry ecosystem.
- Your business community is nested in a wider group of other communities. This is where the edge is most important - they help to knit the communities together.
- The people that work for you or with you also form your community. Each person comes from a larger community, thereby intersecting their community with your business community.
- All of these connected communities form the ecosystem of your business.
So how do we create community margins in these kinds of community structures?
Elements of the Triple Bottom Line Business:
Relationships : We create community margins through the building of relationships. Relationships produce an energy yield.
- Inner (or micro) relationships
- Meso relationships, those people we select or choose to work with, your employees, you and your family
- Macro relationships, the wider communities within which we exist (city, industry).
Transaction vs. relationship continuum:
- Transactions exist on an economic level and produce an economic yield (currency).
- Relationships in which we are sharing ideas and outcomes together produce a yield that is measured in energy. (Example: Red Panda, building relationships with their clients through the sale of their guitar pedals, affect the sounds of a musician and their music).
Relationships are measured in community margin, and transactions in an economic margin. In a small sustainable business, it can't just be about economics because you will wear yourself out. You need to build relationships that give you energy.
Am I learning and evolving? Am I helping the industry learn and evolve? the City learn and evolve?
In the micro primarily - purposeful work gives employees energy...
This is where managing of the edge is critical. Is what you're doing accessible? Open source information? Shared table space at GG is an example of a way to encourage accessibility.
Measurement and Community Wellbeing:
- All that is important cannot be measured. Not everything that is important can be measured, but it doesn't mean it's less important.
- Measurement 's purpose is to promote learning or growth. This is the only reason you would measure (there is an element of accountability in measurement, as well).
- Avoid: Avoid trying to measure anything that has a low level of importance for your business along with little of ease of measurement. Sadly, people get stuck here all the time.
- Very Select: only selective things are measured here
- Strategic Qualitative: Typically in business people avoid measuring the qualitative effect of their work because it is difficult to do. It is important to do, however, and this is where leadership makes the connection.
- Share stories: Leadership needs to share stories and they need to create the conversations around them.
- Use quotes: Use the exact words spoken by others when talking about an aspect or impact of your business.
- Potential for Impact: Bob remarks that measuring how many people participated in your event, for example, doesn't measure the quality of the event. Quantitative measures will give you potential for impact but not the impact itself.
- Strategic Quantitative: Can and must be measured.
- Quantitative measurements support the context of your work.
- Accountability and Potential for Impact: If you don't take quantitative measurements of your business operations, there will be no accountability. In addition, you will never be able to measure quality either, because you will have no basis from which to begin, no way to measure the potential for impact, either good or bad.
Comments about measurement from the group:
- Gina: Qualitative measurement is so vital, and storytelling is key to helping evaluate the impact of a program. Also, it's important to evaluate both before and after a project to be able to measure where the impact lies. Can we baseline the qualitative like we baseline the quantitative? Learning can be measured through storytelling.
- Strategic back casting: Look at where we want to be in the future and where we are right now. The Blueprint of We (look this up)
- Much quantitative measurement is based on very subjective numbers.
- MJ: Boundary between quantitative and qualitative measurements isn't always very clear. Businesses poll people on how they see their brand image.
- Quantitative measurement makes us feel as if we are in control. But we must yield to the fact that our businesses are living organisms and that quantitative measurement is more about accountability than control.
- In order to measure you have to have a stable data source, and many small businesses don't have stable data to start with from which to make decisions. You can't let the measurement become the business, taking over leadership and decision-making. The measurement industrial complex can be totally separated from the business.
- Kirsten: Businesses are pressured to quantify everything and are putting too much energy and time on this and not enough time on simply running their business.
- The results from measurements should be used for learning, not as an absolute to hold up as true. Before you measure something, ask yourself, "what should I use this information for?"
- Social ROI: Engage the public and those you might impact; have them help you to identify what you will measure, what the most meaningful metrics are for your business.
Jess's (Food Lab) thoughts on Community: What do we mean by community wellness? Community resilience? How do businesses, community, city react to changes, problems, opportunity?
- The edge is important because they work with what they have but they are also open to letting new things come in. Who is involved and what you do with your edge really impacts what can be achieved in the area of community wellness. A healthly system allows for permeability, letting things (people, ideas, stories) come in and go out - a closed system isn't healthy.
- Who makes up your core? If your core is homogeneous, they will connect to similar homogeneous groups on the edge and then who are you really serving? Importance of having a core reflective of who you want to serve.
- Who are the stakeholders, are they represented and are you talking to them? Many times people swoop in and start a project without even talking to the community and those who their project will most affect, and then the project isn't successful. There can be a misalignment between your intentions and who you are actually serving.