A Profitability Focus Signals Short-Term Thinking
August 4, 2010 Leave a comment
Ask for profitability and your company may get it, at the expense of customer satisfaction, employee engagement, and product safety. Making profitability a top business goal may lead to massive environmental damage and community backlash that destroys your brand.
What goes wrong when you put profitability first?
Having profitability listed in the top business goals of the company is now considered short-term thinking. Putting profits first ignores the risks inherent in the company’s industry and ignores customer needs and expectations. It encourages risky behavior because it doesn’t even attempt to address the true complexity that is inherent in running a company – a delicate balancing act requiring meeting customer needs and wants at the same as you achieve employee engagement, product safety, minimizing environmental impact and dealing with many other complex variables.
A pure profitability focus is based on an outdated cause-and-effect model, a belief that we can control our profit with our choices and that those choices are more important than our constituents and the impact of what we do on our economic system, our environment and our local and global communities.
“Is Profit as a Direct Goal Overrated?” Jim Heskitt, Harvard Business School Working Knowledge
“Customer-Centric Capitalism” by Irving Wladawsky-Berger
“Profit Can’t Be Primary Goal of Business” by Vivek Kaul
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