For decades, accounting and management tracked their statistics through their Profit & Loss reports, that provided a summary of a company’s revenues, expenses, and profit/loss over a given time. The P&L statement can show a company’s ability to generate sales, manage expenses and create profits, for the owners, investors, and company enhancement. Its preparation is based on accounting principles that include revenue recognition, matching, and accruals, differentiating it from the cash flow statement. These P&L’s portray a company over a period of time, typically a month, quarter, or fiscal year. Most are accurate and offer a slice of the business story.
Like buggy whips and dial-up phones, systems and stories evolve. From internal and external priorities and pressures, companies are evolving their P&L to include environmental and social impact, community involvement, transparent supply chain and resource management. Consumer interest is motivated by product quality, authenticity, origin, sustainability, honesty and dedication to purposes equivalent or greater than mere profit.
It is time to evolve the P&L from profit and loss to Purpose & Loyalty.
Purpose, by definition is ‘something one has in mind to get or do; plan; aim; intention’, from the Latin to set forth. Yes, there can be aims and intentions to focus on revenue at all costs, ignoring humanity and environmental impacts, but purposes such as these are being questioned, and at times rebuked. Research from NBJ has shown that consumers engage at a deeper level and that their purposes are enhanced knowing how their purchase was made and where it was sourced, and this drive is across all demographics. Mintel’s reports that consumers are constantly looking to brands to represent their beliefs and values.
Loyalty by definition is ‘a loyal feeling, faithfulness; fidelity; consistency’. Loyal by definition is ‘true and faithful to love, promise, duty, or other obligations’, from Latin meaning law. Loyalty is such a core value in humans, animals and plants and the basis of culture imbued with respect and inclusion. Who has not experienced that canine loyalty of unbounded love and acceptance? Cats have their own unique loyalty! A recent survey on the meaning of loyalty brought forth these qualities: Acceptance of another’s viewpoint that may be dissimilar to one’s own; Maintaining one’s own ideas in spite of opposition from friends, family or ‘experts’; Forgiveness for errors or omissions; Standing by in challenging times; Offering help and guidance to ensure the success of others; Caring in spite of all and not walking away.
These are times of stress and the best we can each do is to evaluate one’s P&L and help all win. We are here to see both P&L’s succeed.
Gillian