Practices Make Perfect: 5 Aspects of Sustainable Management
HIP Investor spotlights how PepsiCo aligns financials with human impact metrics on Triple Pundit
Practices Make Perfect: 5 Aspects of Sustainable Management
How do leading, well-managed companies consistently deliver top performance and seek ever higher human impact and profit? Five elements of their management systems provide a solid foundation of how a very HIP organization operates:
1. Paints a compelling business Vision that integrates sustainability, complete with deadlines and quantifiable success.
2. Manages performance with a balanced scorecard of five to 10 Measures, including human impact.
3. Aligns all impact measures to the Financial implications and reporting.
4. Establishes Accountability and rewards with successes for sustainable, profitable growth.
5. Embeds HIP criteria into corporate Decision-Making systems.
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3. Financial Alignment
Businesses that reframe their market share, customer segmentation and managerial accounting systems in terms that go beyond mere financials can better understand how drivers of human impact link to financial value. In PepsiCo’s (NYSE: PEP) case, products are classified as “good for you,” “better for you,” and “fun for you.” While 70 percent of products today are fun like Doritos, the good and better categories were estimated in 2009 to have risen to 30 percent of revenue, and and the company plans to move that figure to 50 percent.
Companies focusing on aligning their financials with human impact metrics (in this case, health) have seen global trends boost sales. This connection between human impact and profit makes it easy to see how HIP creates shareholder value.
