Same game, different levels; same hell, different devils

“The first step towards getting somewhere is to decide that you are not going to stay where you are.” —J. Pierpont Morgan

This is exactly where we are today. Every few years we get a jolt to wake us up from our frenzy and drive us to awareness of a different kind. Earlier years we had Wars, but then we brought in a multitude of treaties to discipline ourselves. The Depression and Financial crisis also came with their own resets.

In 2008 the greatest financial crisis of our times brought to us the awareness of bottom line and the focus on health (profitability) of an organizations. We have seen Contribution Margin, profitability and PAT becoming the KPIs for leaders.

In my mind this reset now in 2020 will bring the focus to ESG – Environment, Social and Governance. While there already exists an ESG index and it gets tracked by fund investors for top listed companies its not something we have tracked for all businesses. ESG index claims a direct correlation with long term sustainable performance of the organization.

In the current definition –

·      Environmental criteria consider how a company performs as a steward of nature.

·      Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.

·      Governance deals with a company’s leadership, executive pay, audits, internal controls and shareholder rights.

Addition to the above I think we would add criteria sub headings to the above where –

·      Environmental would also include how the company performs in the state of disruption or calamity from unpredictable and sometimes unfathomable Environmental factors.

·      Social will also include the flexibility, agility and support systems to manage key stakeholder relationships in times of adversity

·      Governance will include policies and procedures for managing unpredictable disruption.

I can imagine organizations wanting to work and partner with organizations that have a higher ESG score as that would be the indicator for sustainability. The leaders will get this added to their KPIs soon enough.

We cant continue to work in this highly connected and converged world without laying down the new norms that will define us.

Even while the ESG index is not a reality I foresee this to be a great differentiator for the early adopters. Even in a competitive commoditized marketplace I would rather chose a vendor with a high ESG index than otherwise. In making a choice for employment I would much rather work for a firm with a higher ESG score or to begin with sensitization.

So what would be your organizations ESG index ?

As the business game resets after this turmoil lets ensure we level up – same game, different levels; same hell, different devils !