The top and bottom line ratio of nature – Management message of mangroves

The common corporate jargons such as ‘bottom line’ and ‘top line’, no corporate employee can ever say they have not heard or know the meaning. Successful companies will always evaluate both the bottom line and the top line of the organization at the end of every financial year so as to understand the overall growth of the organization. Such an exercise also would help the corporate to strategize the action plan for future.

Nature knows the importance and the complete meaning of both terms viz., ‘bottom line’ and ‘top line’ while creating many species of life on earth.

Do all corporate employees know how important and interdependent the bottom line and top line are for the growth and development of the organization? In simple terms, bottom line means the profit and top-line means overall sales.

Nature has the best example for the corporate to learn more about the bottom line and top line. Look at the plant community. The root system of a tree represents the bottom line and the canopy cover, the top line. For the enlarged growth of the canopy cover (top line) of any tree, the bottom line (roots) has to be strong and large. Only when the root system is strong and large, the tree can grow. Scientifically it has been proved that the root coverage will be quite large as like the canopy cover of trees. Unless the profit is two to three folds higher than the expense, no organization can siphon the resource in the promotion or other related activities, which are essential for the future growth and development.

This thumb rule needs not be true for all business models. When the business caters to every day need of the customer, the GP (Gross Profit) can be lesser as the business realization is relied on the volume and not on value. Volumes do add value to the business.

Look at a mangrove tree and water plant for comparison. The root system of mangrove trees is much larger than their canopy cover. They need bigger root system as they live in a very loose soil. In this group of plants, the expenditure will be more and hence we may find the reverse ratio of bottom line versus top line. Whereas the water plants generally require small root system because they live in an aquatic ecosystem where the conduction of water and nutrients can be met easily with such small root system.

How plants would have evolved such root versus canopy balance or in another word, bottom line versus top line ratio. Unless the supply of water and nutrients are regular, continuous and uninterrupted to the plants, no plant can grow. To achieve this, the root coverage has to be large and strong than the canopy cover. This management insight is known to nature and that is how every plant is created.

The modern management pundits need to look at nature and learn from plants how they have evolved and be successful in nature. By integrating the insight of nature, one can manage the business effectively.

Dr. S Ranganathan