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Executive incentives aligned to impact

There is just one truly important event in the economic history of the world, the onset of economic growth.

This is the one transformation that changed everything. GDP in the UK economy grew by an even larger extent, because not only average incomes increased since the onset of the Industrial Revolution, but the number of people in the country increased as well. 

Global economic development has improved the world in which we live but now we find ourselves in a situation where inequality is rising, we have serious risks with our climate, tensions and conflict are becoming deeper within the world.

  • Less than half of the global population have access to essential health services
  • Manufacturing growth is declining to tariffs and trade tensions
  • 789m people lack electricity
  • 2019 was the second warmest year on record, with temperatures set to rise by up to 3.2℃ in 2100

Why do we need impact driven change from business?

To change this we can't simply rely on the Government, Non-Governmental Organisations or the public. We urgently need businesses to step forward and be a driver to this change.

In the UK 27.5m people are employed in business, of which 16.6m are in businesses with fewer than 250 employees. 

The potential for action here is big.

We’re of the opinion that business can be the real driver for change that the world needs to see.

Entrepreneurs, traditional business owners and large corporate organisations are full of talented individuals and committed employees who can all use their skills, vision and drive to make a difference to people, planet and profit.

If we can shift the way of working with the teams that we have in these businesses we can use this talent to positively impact the world.

Barriers to impact change

The challenge is so large people cannot see how their business can make a difference. That should not stop us from making that move. The impact of the ripple effect has been seen time and again. From small acorns oak trees can grow. 

You can find numerous examples of positive impact through financially valuable business - the mindfulchef is one of our personal favourites.            

The second barrier is financial. Your business success is likely measured by financial value. Profit, losses, investment returns on the cash that you're investing. 

If you can redefine measures of success from purely financial, to success on people, planet and profit this will naturally start to change your way of thinking.

‍How can you overcome these barriers?

You should understand what it is you want to have a positive impact on and then  understand what really is possible. There are increasing numbers of examples of businesses both large and small that have adopted this approach with great success. You can check out just a few examples below:

          Timpsons shoe repairs, dry cleaning and locksmiths.

         allplants produces and home delivered vegan meals.

         Mindful Chef delivers quality recipe boxes to your door.

There are many start-ups and fast growth purpose-driven businesses that are seeing huge success across all three areas. I am of the opinion that material tangible difference can be made alongside these newer businesses within established businesses who accept the call to transition.

Many established businesses have driven, commercial and resilient executives within their teams.  If we can harness this knowledge and commitment we can create fantastic impact.

What do you need to consider when incentivising executives?

If you change the way you measure success to a holistic model it would be illogical if you continue to incentivise your executives based on profit or sales outcomes.

Being able to see the impact of your actions is important and visuals will inspire and motivate many but we must also recognise that in our deeply embedded business cultures the way we reward positive outcomes is usually through financial reward.

For many many years executives have been driven and measured by numerical results. We do need to be realistic as to how we can motivate businesses that are established, into transitioning through to sustainability.  This is a catalyst for behavioural change within a firmly established model.

Some may argue that it would not be ethical to reward executives for positive social impact or indeed environmental impact but we do believe if you don't adopt this approach you're going to struggle to take a big swathe of executives with you on your change programme.  

It's our view that it's this swathe of people that have the commercial and creative thinking to really make this happen at a grassroots level. If we want to see this change, which is so fundamental to the way we live, then we believe that financial incentive for executives would have a material influence on the rate in which we move.

How can you incentivise executives to drive change and measure your success holistically?

Carefully consider the level of executive incentives. Is it fair? Does it reflect the effort and outcomes? Are other areas of your workforce receiving relative value incentives?

Firstly begin by engaging your executives in the process.

Involve your executive team in the decisions around the impact that the organisation wants to make.  Getting agreement and buy-in from the beginning will make conversations so much easier.

Work closely with your HR, Finance & commercial teams to devise fair and measurable goals.

Goals would be linked to your impact report, examples of metrics could include: 

- Carbon footprint reduction in the year.

- Job roles created for the local community.

- Diversity metrics in managerial roles.

- Community giving which can be directly linked to profit growth. 

- Product development with sustainable innovation and a viable financial return.

- Supply chain sustainability measurement.

- Achieve sustainability accreditation such as B Corp.

Profit Impact is here to help ease this process and guide you through your approach. You can book a call with Sarah today!


Discover how to incentivise your talented executives and employess and utilise their skills, vision and drive to make a difference to people, planet and profit.

Written by:
Sarah Whale, FCCA
Sarah is the founder of Profit Impact, which guides businesses to measure and grwo long-term positive social, environmental and financial impacts. Sarah has over 20 years experience as a senior financial professional as well as a qualified in Cambridge Institute Sustainability Leadership and B Corp Leader.