Broadening the Definition of "The Bottom Line"

I don’t like change. If you say you do, there is a good chance you are either a masochist, a consultant, or just plain lying. Sure, there are a lot of benefits to change—it can even be inspiring, but do you really seek it out? Or is it just that you are adept at responding to it? Love it or hate it there is no denying that change is disruptive, plain and simple. In business, you’re constantly faced with change - new markets, economic forces, staffing issues, software upgrades, the list goes on. The work of the 21st century business leader is to evaluate how to deal with this endless list of opportunities and challenges, and filter it through the “bottom-line” – financial measures that reflect the health of the organization.

Besides financial measures, what else should leaders take into account in making strategic decisions? How about “Trust Equity”, or how well you and your people operate transparently with each other.

Do you not say your most important assets are those you surround yourself with? Ideally, this core group of bright, articulate and entrepreneurial individuals operate as your eyes and ears, evaluating economic, market and technology changes.

Does it matter if your financials are solid but there’s tension across department? Should you care if your staff isn’t operating to their potential but you’re still making money or expenses are under control? How often do we honestly step back from the fires we are dealing with and ask the broader question “If we were a really solid team, how much more could we do?”

Face it. You really don’t know what’s going on. Your direct reports will do everything in their power to show how well and on target they are, while avoiding news that may concern or upset you. This should come as no surprise. It’s human nature to look out for ones security.

This is a core benefit of building trust equity. Trust is the means to an end, the most important end is knowing what’s going on around you. Although we often operate by the principle “No news is good news”, it’s “What you don’t know that will kill you!” Building trust allows you to manage down in a way that encourages people to uncover issues they don’t think you want to hear.