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Profits are a Reward, Not a Purpose

Guest post by: Jim Clemmer

Article Overview: Why do you get out of bed in the morning? Why do you go to work? What do you want to be remembered for when you're gone? Why do you exist? What about your team or organization? Why does it exist? What's its value-add? What's its function? How do you want to be positioned in the market and minds of your customers? What business are you in?

Profits are a Reward, Not a Purpose

Why do you get out of bed in the morning? Why do you go to work? What do you want to be remembered for when you're gone? Why do you exist? What about your team or organization? Why does it exist? What's its value-add? What's its function? How do you want to be positioned in the market and minds of your customers? What business are you in? These are all questions of purpose. They deal with the deeper motivations and assumptions underlying and intertwined with your visions, values, goals, and improvement intensity. Purpose is the third component of Focus and Context (the first two are vision and values). It could easily be the first. But arguing whether the picture of your preferred future, principles, or purpose comes first is about as productive as arguing whether air, water, or food is most important to life. They're all vital.

Purpose is also called mission, meaning, reason for being, calling, life theme, niche, strategic intent, value-add, business definition, and the like. As with vision and values, what labels you use don't matter. As long as you, your team, and your organization have clear answers to the above questions, use whatever terms make sense. Just be sure the label you use is clear to everybody and is used consistently.

The Profit Paradox

If the reason for your company's existence is profit, you won't be very profitable. Eventually your company probably won't even exist. The dollar sign isn't a cause. It doesn't stir the soul. Operating margins and return on investment don't excite and inspire. As an ultimate objective on its own, the pursuit of profits is hollow and unsatisfying. Such naked greed is one dimensional. It comes from, and leads to, the naked selfishness of "what's in it for me". Profit seekers are out to serve only themselves. In the Intelligent Enterprise, James Brian Quinn writes, "an overemphasis on profits rather than on those things that achieve profits, with rare exception forces an internal and short-term orientation that is actively destructive to service delivery".

Few people today want to buy from, work for, or partner with a company that's only out for itself. That's like taking a set of elaborate architectural drawings for a huge, luxurious dream home into your team or organization and saying, "if you all work real hard, someday this will be mine". About ten years ago I came across a mixed up manufacturer that had produced a slick little logo and published this mission statement - "In Pursuit of Profits". I haven't heard of that company for a few years now. I don't think they're in business any more.

But if your company isn't profitable and financially strong, it won't exist long enough to serve any other purpose. You need clear financial objectives, goals, and priorities. You can't afford waste and inefficiency. You need strong feedback and measurement systems to eliminate the "nice to do" activities and focus everyone on doing only the "need to do" work that produces profitable results. That's the paradox to be managed; companies that exist only to produce a profit don't last long. And companies that don't pay attention to profits can't exist to fulfill their long term purpose. Pursuing profits without a higher purpose or pursuing a purpose without profit are equally fatal strategies. These aren't either/or positions to choose between. They're and/or issues to be balanced. But get them in the right order. Many studies of the role and impact of values or ethics on corporate performance have proven that profits follow from worthy and useful purposes. Fulfilling the purpose comes first, then the profits follow. Profits are a reward. The size of our reward depends on the value of the service we've given others.

Developing a personal, team, and organization purpose that's aimed at serving others adds a richer sense of meaning to our lives. It taps into the deep craving we all have to make a difference. We need to feel that the world was in some way a little bit better off for the brief time we passed through it.

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Article Tags: leadership
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