Decision-Making in a Complex World
- by Lee Huang
It may be difficult to achieve social and environmental goals alongside financial interests, but it’s important to strive toward better business balance.
After years of debating the topic of “triple bottom line,” I still become flummoxed at how this framework gets successfully implemented at the highest levels. For people who are not familiar with this term, triple bottom line is a framework that strives to create greater business value by focusing on three main goals: making profit, looking out for people, and preserving the planet. When you break down the term, the idea makes sense not only in business and government, but also on the individual level. We, as individuals, often attempt to pursue activities that can achieve multiple objectives at once.
But this grand structure, like many other frameworks, exists in theories and papers. In the business world—especially in the digital era—executing it is much more complicated. Reality is unpredictable, and the places where such frameworks are most needed usually are the places where it is hardest to implement them. One example that attracted a fair amount of attention is the 2009 stimulus bill. Even though this example is a decade old, it still illustrates many of the issues we face today.
Achieving multiple goals is strategic and smart, but trying to do so also raises the issue of how we measure if each goal was achieved or not. Additionally, goals frequently compete, making the process of reaching each one a delicate balance. Recently, I was talking to a colleague in government, who mentioned that proposals often are judged based on the following criteria:
- Will it make money?
- Will it be done quickly?
- Will it create jobs?
- Will it improve health, safety, and quality of life?
- Will it have proper oversight?
- Will it adequately involve all of the parties that are affected?
- Will the concerns of business, labor, and civic groups all be addressed?
- Will it properly allocate risk?
That is eight angles from which to judge a proposal. And this list doesn’t even cover the important consideration of how something plays out over time—for example, are we sacrificing short-term gain for long-term loss? Have we set up an initiative so that the right people are calling the shots in the future? How much flexibility do we have if we need to turn on a dime in the future?
Of course, that’s the complexity of pursuing multiple objectives at once, especially in the public sector. In the purely for-profit world, how we determine whether something works or not is brutally clean: you make a certain return on your investment, you sell more widgets, and you stay in business or you don’t. In the more nuanced world of the triple bottom line, our evaluation criteria, for better or worse, is less definitive; and despite efforts to make it more definitive, the precise answer will by definition be hard to capture.
Still, we need to push for more thinking in the realm of the triple bottom line, and we continually need to adapt more measurable ways to quantify and weigh success in all of these categories, even though this line of thought will always bring with it some level of uncertainty. After all, the key decisions we make in life—where we go to college, whom we marry, how we vote—do not easily boil down to one number. Rather, whether we know it or not, we delicately and instantaneously balance multiple decision criteria—be it qualitative or quantitative, head or heart.
To be sure, there are broader actions that can help us all make better decisions, like pricing natural resources better or producing reports that shed light on previously murky areas like child labor or energy efficiency. But ultimately, we as individuals, business owners, and government officials often have to make choices with imperfect information and conflicting priorities. Let’s hope that, when it’s up to us, we make good decisions; and when it’s up to others, we hold them accountable to make good decisions.