Three Bottom Line Performance® at IBM & GP

Three-Bottom-Line Financial Results:

• IBM increased its Return-on-Assets (ROA) from 18% to 42.5% between 1957 and 1978 — the years Lou Mobley’s work at IBM's Sands Point Executive School instilled the three-bottom line approach in all executive trainees were 1959 to 1970. This was a significant contribution to IBM becoming the world’s largest and fastest growing corporation at the time. 

IBM put all their vendors, prospects, and customers on Mobley's ROA Graph and in the Mobley Matrix, thus knowing more about their customer's and vendor's businesses than those leaders knew about their own businesses. IBM performed its projections as a team whose shared financial perspective aligned competing interests, and at times, all but eliminated normal budgeting power struggles. The Mobley approach was so valuable to IBM that it was fiercely held as confidential and proprietary information until 1980. At that time Lou Mobley was finally given permission to share his breakthrough with the marketplace and begin lobbying the Financial Accounting Standards Board (FASB) of the US to add the Cash Statement to US Generally Accepted Accounting Principles (GAAP).  IBM also changed its CEO, its culture, and its approach, and in 12 years its ROA was –22.5%.

• Georgia Pacific decided in 1987 to bring in Chuck Kramer, CPA, to apply Three Bottom Line Performace to focus its finance department, plant operating managers, science and engineering staff, and other decision-makers on improving operating cash flow (OCF), through a series of 12 trainings. In two years, with this shift in focus and the knowledge-sharing shift in the corporate culture, OCF had increased 250%.  GP placed multiple, well received, full page ads in the Wall Street Journal pointing out this increased performance to the stock market. 

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