Back to what drives us
6. Dec 2023

Rethinking economic success

by Annelie Graf und Jana Strüve
Wirtschaftlicher Erfolg muss neu gedacht und weiterentwickelt werden - eine abstrakte weiße Spirale.

Those who think of economic success in new dimensions can demonstrate entrepreneurial courage and a pioneering spirit - and thus develop new potential and new growth.

How can economic success be measured and redefined? And how can social and ecological factors be brought more into focus? These are questions that are currently the subject of intense debate at economic policy level. Because one thing is clear: growth, as we have defined it up to now, goes hand in hand with increasing environmental pollution and thus causes enormous costs.

More and more companies are also asking themselves how success can be measured in a new way beyond the familiar growth figures and see this as an opportunity for entrepreneurial action.

One approach to understanding economic success in a new way is through the concept of the common good. But what exactly does this mean? The common good refers to the interests and well-being of society as a whole - as opposed to the interests of individual persons or groups. It is disputed whether the common good results from the sum of all individual interests and can be described as "the good of all" - or whether it has an independent character.

Theoretical concepts and certifications offer initial approaches and ideas on how companies can align their actions more closely with the common good. Kate Raworth's Doughnut Economics economic theory is based on the existence of planetary and social boundaries and locates a fair and safe space for action within each of these. Another example is the Economy for the Common Good as an alternative economic model with the aim of creating an ethical economic culture whose success criteria are anchored in the common good. Within the framework of the Economy for the Common Good, companies can be assessed using a common good matrix and can check their status quo. There are a number of other theories that present alternative proposals for a common good-oriented economy. In addition, there are certificates such as Benefit Corporation (BCorp), which review corporate actions through external assessment and recognize them for their particular social and ecological impact.

Engaging with the concept of the common good and thus with new dimensions of economic success can open up new growth opportunities for companies beyond purely economic indicators.

Common good as a new yardstick for corporate success

The political and social pressure on companies to adopt a long-term sustainable approach is increasing. Regulations such as the EU taxonomy for classifying sustainable economic activities, which has been in force since the beginning of 2022, and the Sustainable Development Goals (SDGs) defined by the United Nations provide companies with initial guidance on how to align themselves sustainably. In addition, companies are increasingly being required to report on environmental, social and governance (ESG) factors, for example.

In addition to the external framework conditions, the intrinsic motivation of companies can be a further incentive to align corporate success with new dimensions. In order to secure long-term growth and operate within planetary boundaries, companies must understand success as more than just maximizing profits. In future, success can no longer be viewed in isolation from the common good, but must be negotiated in the context of climate targets, diversity, transparency, co-determination, solidarity and justice.

For example, the coalition agreement stipulates that Deutsche Bahn organizes the rail infrastructure for the common good. This is intended to "prevent the transfer of profits from the Deutsche Bahn network". The outdoor outfitter VAUDE is another example of a company that records its Contribution to the common good. This is done with the help of the common good balance sheet, with which the company systematically records its contribution to the common good in a comprehensive auditing process.

First step: More common good in the company KPIs

In addition to alternative economic models and external certificates, structures that are already anchored in the company can also be designed to be more common good-oriented. For example, in the KPIs. The use of KPIs (Key Performance Indicators) is an established method of continuously monitoring performance, capacity utilization and business success and making them measurable. These characteristics make them a suitable instrument for actively integrating the common good into the corporate strategy. To date, however, ecological and social sustainability aspects have been insufficiently taken into account in the KPIs of many companies.

Specific KPIs can help to ensure that the common good is not just seen as a secondary objective, but as an integral part of the corporate strategy. Only in this way can companies track their progress in this area, take responsibility and be successful and sustainable in the long term.

New KPIs could be, for example, transparency and co-determination in the supply chain, the purpose and social impact of products and services or the reduction of environmental pollution. New control systems can serve as a lever for new growth and thus open up innovative dimensions of action for companies. Exploring such dimensions of action can be the first step for companies on the way to new KPIs - and thus to a responsible approach to society, the environment and the economy.

diffferent is happy to accompany companies on their way to new dimensions of action and help them to expand their KPI set.

We are happy to receive project inquiries

Paul End,

Business Partner Sustainability Transition