The value of bottom-line thinking

How do you figure out the bottom line for your organization, business, department, team, or group? In many businesses, the bottom line is literally the bottom line. Profit determines whether you are succeeding. But dollars should not always be the primary measure of success. Would you measure the ultimate success of your family by how much money you had at the end of the month or year? And if you run a non-profit or volunteer organization, how would you know whether you were performing at your highest potential? How do you think bottom line in that situation?
A Non-Profit’s Bottom Line

Frances Hesselbein had to ask herself exactly that question in 1976, when she became the national executive director of the Girl Scouts of America. When she first got involved with the Girl Scouts, running the organization was the last thing she expected. She and her husband, John, were partners in Hesselbein Studios, a small family business that filmed television commercials and promotional films. She wrote the scripts and he made the films. In the early 1950s, she was recruited as a volunteer troop leader at the Second Presbyterian Church in Johnstown, Pennsylvania. Even that was unusual, since she had a son and no daughters. But she agreed to do it on a temporary basis. She must have loved it, because she led the troop for nine years!

In time, she became council president and a member of the national board. Then she served as executive director of the Talus Rock Girl Scout Council, a full-time paid position. By the time she took the job as CEO of the national organization, the Girl Scouts was in trouble. The organization lacked direction, teenage girls were losing interest in scouting, and it was becoming increasingly difficult to recruit adult volunteers, especially with greater numbers of women entering the workforce. Meanwhile, the Boy Scouts was considering opening itself to girls. Hesselbein desperately needed to bring the organization back to the bottom line.

“We kept asking ourselves very simple questions,” she says. “What is our business? Who is our customer? And what does the customer consider value? If you’re the Girl Scouts, IBM, or AT&T, you have to manage for a mission.” Hesselbein’s focus on mission enabled her to identify the Girl Scouts’ bottom line. “We really are here for one reason: to help a girl reach her highest potential. More than any one thing, that made the difference. Because when you are clear about your mission, corporate goals and operating objectives flow from it.”

Once she figured out her bottom line, she was able to create a strategy to try to achieve it. She started by reorganizing the national staff. Then she created a planning system to be used by each of the 350 regional councils. And she introduced management training to the organization.

Hesselbein didn’t restrict herself to changes in leadership and organization. In the 1960s and ’70s, the country had changed and so had its girls—but the Girl Scouts hadn’t. Hesselbein tackled that issue, too. The organization made its activities more relevant to the current culture, giving greater opportunities for use of computers, for example, rather than hosting a party. She also sought out minority participation, created bilingual materials, and reached out to low income households. If helping girls reach their highest potential was the group’s bottom line, then why not be more aggressive helping girls who traditionally have fewer opportunities? The strategy worked beautifully. Minority participation in the Girl Scouts tripled.

In 1990, Hesselbein left the Girl Scouts after making it a first-class organization. In 1998, she was awarded the Presidential Medal of Freedom. President Clinton said of Hesselbein during the ceremony at the White House, “She has shared her remarkable recipe for inclusion and excellence with countless organizations whose bottom line is measured not in dollars, but in changed lives.” He couldn’t have said it better!

Why You Should Enjoy the Return of Bottom-Line Thinking

If you’re accustomed to thinking of the bottom line only as it relates to financial matters, then you may be missing some things crucial to you and your organization. Instead, think of the bottom line as the end, the take away, the desired result. Every activity has its own unique bottom line. If you have a job, your work has a bottom line. If you serve in your church, your activity has a bottom line. So does your effort as a parent, or spouse, if you are one.

As you explore the concept of bottom-line thinking, recognize that it can help you in many ways:

1. Bottom-Line Thinking Provides Great Clarity

What’s the difference between bowling and work? When bowling, it takes only three seconds to know how you’ve done! That’s one reason people love sports so much. There’s no waiting and no guessing about the outcome.

Bottom-line thinking makes it possible for you to measure outcomes more quickly and easily. It gives you a benchmark by which to measure activity. It can be used as a focused way of ensuring that all your little activities are purposeful and line up to achieve a larger goal.

2. Bottom-Line Thinking Helps You Assess Every Situation

When you know your bottom line, it becomes much easier to know how you’re doing in any given area. When Frances Hesselbein began running the Girl Scouts, for example, she mea­sured everything against the organization’s goal of helping a girl reach her highest potential—from the organization’s management structure (which she changed from a hierarchy to a hub) down to what badges the girls could earn. There’s no better measurement tool than the bottom line.

3. Bottom-Line Thinking Helps You Make the Best Decisions

Decisions become much easier when you know your bottom line. When the Girl Scouts were struggling in the 1970s, outside organizations tried to convince its members to become women’s rights activists or door-to-door canvassers. But under Hesselbein, it became easy for the Girl Scouts to say no. It knew its bottom line, and it wanted to pursue its goals with focus and fervency.

4. Bottom-Line Thinking Generates High Morale

When you know the bottom line and you go after it, you greatly increase your odds of winning. And nothing generates high morale like winning. How do you describe sports teams that win the championship, or company divisions that achieve their goals, or volunteers who achieve their mission? They’re excited. Hitting the target feels exhilarating. And you can hit it only if you know what it is.

5. Bottom-Line Thinking Ensures Your Future

If you want to be successful tomorrow, you need to think bottom line today. That’s what Frances Hesselbein did, and she turned the Girl Scouts around. Look at any successful, lasting company, and you’ll find leaders who know their bottom line. They make their decisions, allocate their resources, hire their people, and structure their organization to achieve that bottom line.

From How Successful People Think