If asked the question: ‘Why are you in business?’, it’s not uncommon for the business owner to respond by saying: ‘At the end of the day we are in business to make a profit.’ I get it. That’s honest and forthright. After all, turning a profit is essential in meeting shareholder expectations, whether a public or private company.
Here’s a different way to respond to this question. We are not in business to make a profit; we are in business to stay in business. And, in order to stay in business, we need to be profitable. Can you see the difference?
Let’s keep going. First, let’s not say make a profit but rather earn a profit.
Second, why do we want to stay in business? We want to stay in business because we believe in our mission. Therefore, the longer we are around, the more good we can do; the more people we can help. We truly believe in what we do. We see our product/service as contributing to the betterment of society. Thus, we have this mandate to stay in business. And, to stay in business, we need to have revenue greater than expenses.
No doubt, coming to work for a company that sees its main goal to earn a profit doesn’t light the inner flame as much as coming to work for a company that wholeheartedly believes in its mission – and therefore feels a duty to exist and survive for the betterment of the world around them. You can see how in this scenario, the motivation to earn a profit takes on a deeper meaning.
As a side note, I’ll admit this mindset gets a little difficult to defend when the mission is something ‘iffy’. Think alcohol, tobacco or firearms. I’ll leave that discussion for another day.
So, let’s look at an example. You’re in the airline business. You bring people together. You make it possible for people to unite with friends, family, business associates. You solve logistics problems. You arrange for reunions, annual meetings, M&A opportunities, vacation and leisure travel. You also transport important cargo. I’d say that’s a mission worth perpetuating. That airline may hold the view that the longer they are around, the more good that takes place in the world. Therefore, it’s important that it continue to exist. And for that to happen, it needs to earn a profit.
The next time you are looking over your business financials try looking at their meaning in a more macro way. Sure, you want to know that you are tracking favorably to your operating plan and on target to hit your desired financials.
But then ask ‘why’? And the answer is, we want to hit our financials so that we can stay viable. So that we can remain in business. So that we can continue to carry out our mission. And in doing so, we will be able to continue helping those that desire our product or service. And, therefore, we will have done our part to make the world a better place.
#leadership #leadership speaker
