from ROI to IOI
For too long, the metrics of success in business have been rooted in financial returns alone. ROI (Return on Investment) has reigned supreme, steering decisions based solely on shareholder gains. But in a world facing climate emergencies, social inequities, and biodiversity collapse, this one-dimensional focus no longer serves us. We need a new language, a new framework; one that prioritises not just profits, but a cleaner, greener, fairer future. If we our businesses are not shaping a better world, what license do we have to operate?
Enter IPIs (Impact Performance Indicators) and IOI (Impact OF Investment).
From KPIs to IPIs: Redefining Performance
Key Performance Indicators (KPIs) have long been the yardstick for measuring business success. But what if we expanded this lens to include Impact Performance Indicators (IPIs)? These would evaluate the ripple effects of business activities on people, communities, and our planet. Imagine boardroom conversations where the questions evolve from:
- “How much revenue did we generate this quarter?” to
- “How many lives did we improve, and how did we support our communities, what did we contribute to building a healthier planet?”
IPIs could measure metrics such as carbon reductions, social equity improvements, and employee well-being. By embedding these indicators into core business strategies, leaders can create organisations that thrive not just today, but sustainably for generations to come.
From ROI to IOI: The Impact of Investment
Money is the lifeblood of business. Investments, whether from private equity, venture capital, or internal budgets, fuel growth and innovation. But what if every pound invested was evaluated not only for its financial returns but also for its impact?
- What societal challenges does this investment address?
- How does it reduce environmental harm or restore natural systems?
- How does it uplift communities?
IOI shifts the conversation from short-term gain to long-term value creation. Imagine a future where investors choose opportunities based on their ability to contribute to a cleaner, greener, and fairer world. This isn’t just the right thing to do, it’s the commercially savvy thing to do. Recent research from B Lab shows that B Corps outperform traditional businesses in terms of resilience, long-term growth, and adaptability.
The Business Case for Impact: What the Data Tells Us
The world of business is changing at an unprecedented rate. Business as usual is no longer fit for purpose. According to PwC, 45% of CEOs don’t believe their businesses will be viable in 10 years’ time. Reinvention is no longer optional; it’s essential. Investors, too, are increasingly seeking businesses that are low-risk, high-growth, and resilient. These characteristics align closely with organisations that prioritise social and environmental impact.
In fact, Patagonia’s report “An Investor’s Guide to B Corps?” highlights how B Corps consistently outperform their peers on metrics like employee retention, innovation, and customer loyalty—all of which contribute to long-term business success. These insights underscore the growing demand for businesses that balance profit with purpose.
A Call to Courageous Leadership
To change the conversation in the boardroom, we need leaders willing to think beyond the next quarterly report. It requires courage to challenge conventional wisdom and embrace a broader definition of success. This is where our Impact Leadership Programme (ILP) comes in.
The ILP is designed to equip leaders, sustainability consultants, and advocates with the tools and frameworks to:
- Develop IPIs tailored to their unique business context.
- Advocate for IOI in discussions with investors and stakeholders.
- Build organisations that balance financial success with meaningful impact.
The Future We Build Starts Today
Imagine the collective impact if every boardroom in the UK adopted this approach. Businesses would become powerful catalysts for change, driving innovation that regenerates rather than depletes. Communities would flourish, inequality would diminish, and our planet would begin to heal.
We believe this vision is not only possible but essential. Join us in leading this transformative shift. Applications for the Impact Leadership Programme are open until 13th December 2024. Let’s create the future we all deserve.
“What you do today determines what our world looks like tomorrow.”
Are you ready to change the conversation in your boardroom? The time to act is now.
Key Actions for Readers:
- Engage: Comment below with your thoughts on IPIs and IOI. How could they transform your business?
- Share: Spread this message to your network and ignite the conversation.
- Apply: Register for the Impact Leadership Programme before the deadline to become a leader in this movement.
Together, we can reimagine what success looks like and create a legacy of impact.