People Before Profits Is Wrong

People Before Profits is WrongHow’s that for a headline? No, you didn’t read it incorrectly. Companies should not put people before profits.

Before you get upset, bear with me for a moment.

I got thinking about this on a recent business trip on which I took five flights in three days, all of which were mostly full. While I hate a middle seat as much as anyone, I was glad the airlines appeared to be making money. I admit it—as a passenger, I’ve occasionally wondered if legroom and customer service are the only things the airlines have been trimming back, hoping they haven’t been cutting corners in the maintenance department as well. Full planes, for all of their discomfort, at least suggest the money is there to do proper maintenance.

So yes, in my minor epiphany I realized that I actually want the airlines to make money. And you probably do too, if you think about it. I travel a lot and, due to the fast-changing nature of my business, I sometimes pay through the nose for the privilege. I don’t always like the prices I pay, but I don’t want the airlines going broke either. For them to put people before profits would not only be wrong, but highly irresponsible.

I don’t us the term “wrong” here in a moral sense, although in the airline example it certainly would be. What I’m saying is that putting people before profits is incorrect, for one simple reason: It’s unsustainable. Any company that thinks it’s helping the world by doing so won’t be around for long. (And in the case of an airline, it may take a few hundred people down with it. No thanks.)

As you might suspect, the headline of this post could have put things the other way around. Putting profits before people is equally wrong—incorrect—for similar reasons. Any company that neglects the needs of those it serves (or worse, actually injures them) is also unsustainable. The key, as with most things in life, is balance.

It doesn’t make for very good soundbites, but the suggestion that companies somehow choose between people and profits is a fallacy. Sure, there are exceptions that make headlines, but they do so precisely because they’re exceptions. And they rarely, if ever, represent deliberate boardroom strategy.

The interests of consumers and companies are ultimately aligned. People who are responsible for generating long-term corporate success understand this at a fundamental level. And while the advent of social media doesn’t make that any more true, it does make missteps all the more (and more quickly) noticeable. That’s a good thing.

I want my customers to prosper and be delighted with our services. I also want my company to make a reasonable profit (so do my clients, by the way). There is nothing contradictory about those two aims, and if my firm errs on either side we won’t be long for this world. No company will.

It’s not people or profits. It’s people and profits. Together they deliver progress and prosperity for everyone involved. Always have, always will.

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Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of “When Growth Stalls: How it Happens, Why You’re Stuck, and What To Do About It.” Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

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2 Responses to People Before Profits Is Wrong

  1. Neil Reay says:

    OK, this analogy is totally wrong, just to get a catchy headline. If an airline puts people first, it will automatically insure their safety. No one would jeopardize their first priority. In fact, it is more likely that a people-first strategy would put safety higher on the priorities than a profit-first strategy. The example used is valid only if certain characteristics are put first, such as comfort or space, not full people-oriented services.

    If you want profit first, try drugs, arms dealing, gambling, human trafficking, extortion, kidnapping, etc. Yes, the author backs down and says a profit-first strategy is also wrong, so we are left with a nothing-first or an everything-first strategy as options.

    Companies that want to be in a business other than those above will need to earn adequate profit and cash flow to provide services and continue in existence, but profit should be an outcome of strategy, not be the purpose of strategy. Profit first means Goldman Sachs sells out its 100+ years reputation for quality and dependability to make some quarterly earnings (and earn executive bonuses). Profit first means airlines are trying to drive their customers to other forms of travel or to virtual meetings because they forgot that they are in a service business rather than a financial one. Make yourself indispensible to your customers, and you will never go hungry. And care for your employees, and they will keep you indispensable.

  2. mark says:

    seems funny companies making billion dollar profits, paying ceo’s millions + are willing to send families and individuals to bankruptcy or worse over thousand’s of dollars, must make there portfolio’s look so impressive.
    success should be measured by helping those less fortunate, or saving jobs rather than that beefy bonus the top dogs take.
    Pure greed and vanity .

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