Purpose or Profit?

Purpose or Profit?

In my last post I spoke about the customer promise. Well it was introduced. A little. It’s something I will continue to speak about and also explain how to embed the Customer Promise in posts to come. I’ll also leave you with resources to assist you in creating this promise along with how to build this into the rest of your department, division, business, family or just about any structure you wish to apply it to. You see the beauty of the topic is that it is universally applicable to just about anything. Today i want to take a step back and get into a bit of science and philosophy. It’s not quite chicken and egg, more like which one do you aim for the get the other. I’ve had this argument with more CEO’s and CFO’s than I’d like to remember. Is it about purpose or profit?

Let’s take a reductionist approach. If you have profit as a company target, then everything you’re doing should be aligned and optimised within your organisation to achieve the highest profit possible for your given set of variables. Correct? Yes! Except those variables become constrained within a frame. Your products, your systems, your people, your practices. All you end up doing (assuming that the modern organisation is advanced enough) is optimizing a linear algebra problem on two variable. How do i MAKE more money and how do i SPEND less money. Hey presto, another cost cutting exercise.

The temptation to disagree will be very strong and i accept that we cannot run a business without profit, however, think about what we’re saying here. Profit isn’t the reason we run a business, nor is it the reason our customers purchase our product and lastly it’s not the reason people work for an organisation. There are many proponents of the Purpose Led Leadership movement and for expediency I won’t mention them by name. Yes it is the “WHY?” we exist, and when all three components, The Organisation, Customers and Employees are clear about this purpose it is a beautiful thing to behold as the pieces come together to create true synergy.

Purpose is not a vision, it’s not a mission and it’s certainly not the “Thing we do”. I’ve heard it from many a CEO; “Our Purpose is to build the best banking products”, “We aim to deliver the best hardware”, “We will be the best company to work for”. Hate to tell ya…none of these represent a broader purpose

My point is that Profit is not an outcome but a rather blunt point to which we are aiming. Profit has only two levers: Revenue and Cost. Revenue is largely less controllable than cost so the easiest thing to do is pull the cost lever. Most often this hurts the most valuable part of the organization: People.

Many will look at this and scoff at purpose being a soft, esoteric measure for the tree-huggers. Well let me share the results of one case study:

A team I have worked with designed and implemented it’s own purpose within an organisation. The results:

Sick Leave: down 67%

Productivity: Up 700%

Team Engagement: Up 87%

Cost: Down nearly 50%

All these driven by the team itself by NOT MEASURING COST or PROFIT but how well the team managed their purpose collectively whilst dealing with their customers.

A wise man once told me. Until People are put in the asset column of the balance sheet, organisations will continue to treat them like furniture. Profit is not sustainable without a single minded border purpose bigger than self, bigger than the team and broader than the organisation.

We are going to begin the journey to empower you to develop your teams and companies purpose. The template exercise is not available here for download

Defining the Purpose
Purpose or Profit

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