As Impact Investing continues to grow upon the shoulders of SRI, ESG, TBL it is a fact that it is gaining far greater momentum than its predecessors put together. However, the euphoria around Impact Investing is placing a shadow on something that can have a far greater positive effect on humanity, the planet and financial returns and that is Impact Management.
Many experts agree that over the next 50 years, the greatest accumulation of wealth in earth will be amassed by people who innovate solutions for the social and environmental problems we face. In addition, the futures highest and most sustainable profits (including financial) will be delivered by leaders who embrace Impact Management, and become the platinum standard of how they steward the human, financial, and environmental resources they require to operate their companies.
Accordingly, if we simply look at the scale of what is called corporate America (let alone the world), we will see the profound impact that an adoption of Impact Management would have.
There are a little over 18,000,000 registered companies in the United States. Combined they employ over 122,000,000 people, they touch every community in the US, and they all use financial, human and environmental resources to run their businesses.
The public companies hold more than $2 Trillion in cash assets on their balance sheets, indeed some of it is levered and too much remains off shore, however for the focus of this conversation let us assume that the cash on hand at private companies makes up the difference.
So what could happen to companies and society if every business leader truly embraced Impact Management and Leadership?
Generate higher revenues
Positively effect 122,000,000 employees and the people/communities they support
Produce greater margins
Help increase the velocity of capital and standard of living in virtually every community in America
Deliver enhanced bottom line results
Reduce the effects of climate change and help steward and regenerate imperative parts of our environmental ecosystem
Increase brandy and equity values
Support investments in Impact/Purposed/Mission driven businesses while making a profit
Decrease employee and customer/client turnover
Help imperative initiatives get to scale
Hire the best and brightest talent
Bring off shore capital back on shore
The current management theory being taught at undergrad and grad schools, and being passed on at companies is wrong. That in of itself has to change, which is why we run our Executive Education Impact Management Retreats.
All of the purposeful work we do at In Place Impact is part of a new paradigm of circular economy that we have deigned, and that works. Impact Economics is a program that provides all community stakeholders with a seat at the table, so that when economic vibrancy is increased, everyone benefits.
Impact investing is a very important piece of the whole systems approach to achieve a sustainable future, but when you simply look at the numbers, Impact Management & Leadership can have a much greater and more profound effect.