The Triple Bottom Line By Mark L. Vincent

The Third Line Matters Most

You are likely part of an associational system or line in some aspect of your life.

WAIT! Don’t stop reading!

This statement means that the place you do business, your work in a ministry organization or nonprofit, your congregational home, your family, your involvement in a civic organization, your participation with some home-based business, and your membership in most anywhere put you in a unit of a larger whole that somehow must work together. Do you know what matters in such a case?

The most familiar associational system is a franchise, with roots that go back to Benjamin Franklin’s print shops. Religious communities, trade associations, and guilds of certain professions are even more ancient—almost to the dawn of civilization.

Few scholars study associational systems because they are hard to qualify or quantify. Family-owned and publicly traded companies are much easier to observe and measure. And yet, associational systems are far more prolific and richly diverse.

They are also difficult to govern because the power base in an associational system spreads among all the players, not just stockholders. We can easily observe this spread-out power dynamic in what many call the double-bottom line. 

If we are talking about franchising, the corporation that issues the franchise and the franchisee that operates one of the franchises are businesses that got hitched at the altar, pledging to do their work in concert. Each has a bottom line of profitability that must be managed (if it is a for-profit entity) or a bottom-line fee or percentage of income that must be pooled (if it is a nonprofit), hence the phrase “double-bottom” line. 

There is a triple bottom line, and this third line is the most important. The third line is the amount the franchised arrangement produces—which is mutually beneficial for the whole system. One player benefitting at the expense of other parties languishing is not a long-term benefit to anyone.

Few associations track the third bottom line. Many do not even collect the information to help them identify or track it; fewer still make strategic decisions based on it. Most parties in associational systems protect themselves ahead of their partners, usually to the harm of the partnership. Self-interest brings them together, and self-interest harms the relationship in the future because the partners aren’t tracking or strategizing for the joint benefit of the whole.

Astute observers will notice conflicts between players in associational/franchised/licensed organizations often make news headlines. For example, Reuters reported this story nine years ago: EuroDisney’s economic difficulties in paying hefty licensing fees. That story serves as a very public example of a constant phenomenon.

Consider the closing of historic denominational bodies and their institutions, including missionary sending agencies, printing houses, colleges, and seminaries. The endless splitting of denominations (associational systems) made for much redundancy. That redundancy made the care for the partnership and the triple bottom line all the more important to be visible and keep growing amid all of the competition for resources. Somewhere in there, the mutual self-interest that brought the entities together in a founding partnership needed to transform into a mutual mission governed by the power of a well-curated third bottom line. But we find almost no one counting or curating it.

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ᐧDr. Mark L. Vincent is the Founder of Design Group International and the Society for Process Consulting. He hosts the Third Turn Podcast and facilitates Maestro-level leaders. Discover the Maestro-level cohort that is waiting for you! Click the banner below to learn more!