The whole and its parts

The whole & its parts

Challenges of profit maximization

Recently I attended a shareholders meeting. We were not invited to listen to some stories describing what had been achieved and what the upcoming plans were. Instead, the stories shared with us were a long enumeration of the financial results.

As if they would be an accurate description of what had been done. The presentation was confusing the measurement with the achievements.

Having achieved excellent results, they rightfully were very satisfied. However, when a question about governance came up, it showed how satisfaction with the result forbade questions about how these results were achieved.

Having identified himself with the results, the CEO was assuming that his management was not to be questioned.

Explaining some of the ongoing projects, he stayed in a vague vocabulary, making it hard for the audience to capture what these projects were for. He had not taken the time to gain a deep enough understanding of these projects. He could not describe what they were for. Thus showing that his focus wasn’t on the ongoing projects but on the results they could impact.

With their attention focused on their profit, the meeting made visible how disconnected they had become from the service they are providing.

And it isn’t fully their fault. One of the most important beliefs around a business is, that its purpose is to make money. Once this idea is established, the logical consequence becomes, that the profit needs to be maximized. It assumes that there is a law that a business can be saved from failure by charging the right price.

Whenever the focus becomes one of profit maximization, it establishes a path on which the customer will be ignored instead of created.

Profit is important for an organization, there is no question about it. However, profit is not the organization’s purpose. Oxygen is necessary for a human being, but it doesn’t elevate oxygen to a purpose.



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