The HIP Investor

1. Paints a compelling business vision that integrates sustainability, complete with deadlines and quantifiable success. 2. Manages performance with a balanced scorecard of five to 10 measures, including human impact. 3. Aligns all impact measures to the financial implications and reporting. 4. Establishes accountability and rewards with successes in

As consulting firm Bain has measured, the most profitable customers are a firm’s repeat customers (Reichheld and Allen 2004). Once a customer finds a product that solves a problem, they tend to buy again, as long as the company keeps them happy. And when customers become net promoters (i.e., willing to recommend a company to others), those firms ex

What gets measured gets managed. That’s one of the main contributing factors to the short-term profit orientation of robber-baron capitalists and investors. But the measures tend to be short-term and financial-only, which creates added risk because it does not properly account for leading indicators of performance that ultimately drive financials.

1. Product, the coffee mainly. 2. Partners, the suppliers and farmers. 3. Customers, who generate revenue. 4. Stores, and the employees who work in them. 5. Neighborhood, and the communities the company facilitates. 6. Shareholders, the co-owners of the company (Starbucks Coffee Company Web site).

Now that you have evaluated a company’s products, operating metrics, and management practices, the fun part starts—mapping it to profit and valuation. The exciting news is: Building a better world generates bigger profits and higher shareholder value.

The leaders have found that high retention rates boost customer service and hence revenue, while keeping turnover costs low, yielding a profit advantage.

dollars being invested under the auspice of “doing good” (Social Investment Forum, ii). This approach is designed to make investors feel good about their portfolio investments, typically by screening out companies that sell “bad” products, like cigarettes, alcohol, and nuclear weapons.

Today, there is broad support for a HIP mindset among consumers, employees, company leaders, investors, and their advisers. While the traditional belief espouses that seeking human, social, or environmental benefits in your portfolio requires an investor to give up financial returns, HIP’s in-depth findings show that optimized businesses require a

One of the most shocking numbers from this survey was that charitable giving was ranked “more important” than creating new revenue growth by the CSR corporate leaders group. In other words, they believed it was better to simply give money away than to innovate new products that both improved the customer’s quality of life and grew the business.