What’s success to us? 4D Wealth
At Ridge Group Investments (CRP’s Parent company), we have a term that is foundational to our investments: 4D Wealth. This is a term we use frequently, multiple times a day, to describe people, projects, and investment opportunities we come across. It’s a shorthand way for us to communicate whether a deal is right for us or not. 4D Wealth refers to the 4 dimensions of wealth we seek to create and the standards by which we measure success. To RGI team, building wealth means creating value across all of the 4 dimensions.
What are the 4 dimensions?
1. Financial (Money)
2. Relational (Connections)
3. Social (Impact)
4. Intellectual (Innovation)
Conceptually, 4D Wealth means the same to each of us at RGI but practically shows up in different ways. We’ve also started using that language with partners we work with, and realized the people who we choose to do business with are already practicing 4D Wealth. Often they might not be aware of it and even if they are aware, they don’t have language to communicate how it’s an integral part of their company.
As an investment company, RGI is in the business of creating wealth over the long term. While most people typically have a one-dimensional interpretation of wealth (money), we define wealth as multi-dimensional because wealth to us means fullness and richness outside of solely money. We seek leaders who share that view of life, where money alone doesn’t equal success. We’ve worked hard to incorporate this into our investment thesis and have built a framework around 4D wealth because for us, this is a strategy that increases our chances for success just like Six Sigma or EOS. We are able to do this because we invest our own capital and are not constrained by the same limitations of fund managers who take external capital.
We believe by focusing on relational, social, and intellectual wealth in the short term, companies will actually enhance financial wealth in the long term, and in turn maximize Wealth. Where most people get stuck is how to measure connections, impact, and innovation — because our society has defaulted to measuring money as the best indicator of success, measurements of the other dimensions of wealth have never been developed. At RGI we’re working to change that.
So how do I practice 4D Wealth?
Chances are, if you’re nodding your head while reading this article, you already do practice 4D Wealth, you just don’t call it that. I encourage you to first simply be aware of what drivers influence the major decisions you make at your company. Use these questions as prompts to help you develop your own framework of 4D Wealth
1. Financial — What is the purpose of making money?
2. Relational — Who will I (and my team) grow closer to as a result of our company’s existence? Do I have their best interest as much as my own?
3. Social — Why is this good for humankind in the long run?
4. Intellectual — How are we thinking about things in a different way than anyone else?
That all sounds great, but is that actually realistic?
There are a handful of companies who have practiced 4D wealth without calling it that, the most notable being Patagonia. Patagonia is an example of a company whose existence and purpose is much deeper than commerce. Their mission and the reason why they operate is clearly stated in their mission statement “to use business to inspire and implement solutions to the environmental crisis”. They understand the importance of financial health and making money (for example, they sell their products for a premium with a healthy margin), but their significant strategic decisions are not made based on financial performance. In fact, over the last 10 years they have intentionally made decisions that negatively impact their financial performance in the short term in order to adhere to their mission.
Some examples of how Patagonia has practiced 4D Wealth:
Relational:
· Worn wear mobile tour
· Give a Damn campaign (current website — no black Friday sale info)
Social:
· No branded vests / gear for financial services companies
· Don’t buy this jacket campaign
Intellectual:
· Circular economy
· Fabrics
As investors, we believe if we encourage our founders to focus on the things that create lasting value, then we will have succeeded.
