No matter what business you may be in, there is likely a ‘profit’ you are pursuing. Profit being a metaphor for an outcome; an outcome that you believe is the measure of success for your business. We could say it’s where your ‘heart’ is in business. But no business exists to profit, and the pursuit of your ‘profit’ is likely undermining the performance of your business. And the result is less ‘profit’ than would otherwise be possible.
Active Knowledge Question:
What is ‘profit’ in your business?
The Fallacy
The greatest fallacy of our time is that businesses exist to profit. And in most cases, that is profit in a monetary form. Some others who define themselves as in the not-for-profit sector will see monetary profit as important, but their ‘profit’ is more likely to be something expressed as the number of people helped.
The fallacy lies in that profit, in whatever form it may be represented in your business, is an outcome. It is a result of effort. It is not a catalyst of performance and measuring performance against that ‘profit’ will only lead to you missing the real catalysts.
If you think of profit as your gold medal (first place), then stepping into the competitive arena with an obsession with winning that gold medal will likely result in you losing rather than winning. As you lean into winning that gold medal and winning at all costs, you quickly lose sight of what is it that will actually enable you to win.
If day after day the prime focus in your business is that ‘profit’, and you measure it, monitor it, reward people on their contribution to it and celebrate its achievement, then nothing else will count in your business. And everyone will know that the only thing that matters is achieving the number, which is the goal of that profit.
Borrowing from scripture, if that profit is what you treasure above all else, it will be where your mind and heart is focused to the exclusion of all else. And that is why performance diminishes where profit is all dominant.
Whatever your ‘profit’ maybe it can only be optimised by recognising the catalysts of performance and drawing a focus to those catalysts. And accepting that the outcome, being your profit, is a result of performance, not the catalyst of performance.
It’s About Potential
Performance is often judged by measuring an outcome against a historical figure, a target, a goal or a benchmark. It’s referenced against history, a required return or what someone else has achieved. In business, performance is rarely measured against potential or capability.
Place yourself in the role of being a sporting coach. Yes, you want the team to win, but you also know that only comes about by building capability and strengthening the competitive performance of that team. On the day of the competition, they need to focus on bringing their best performance to the forefront and leveraging their capability to its greatest point. And hopefully, that will be sufficient to outcompete the other team, and if so, the win will be yours.
But if they didn’t perform at what you know they are capable of; you will be ‘having a few words’ with them after the match. And highlighting that they only won because the other team ‘totally dropped the ball’ and they should consider themselves lucky.
In business, it should be no different. Leadership should be looking to unlock, build and compound on the potential of every person who works within and with your business. What was achieved last year is not a measure of performance. Whether your business gave it’s all is what you must be measuring.
What is the potential of your business? Do you really know what it is capable of? And do you know how to bring that forth and build on it?
Performance should be seen as just not reaching a target but rather delivering our best. Better still, it should be seen as stretching our limits and compounding.
To Compete
Performance arises from capability, is enabled by leadership and focus and is powered by motive:
- Capability is represented by the combined talent and effort of every single person working within and with your business.
- That capability is enabled by leadership and directed by strategy.
- But without the right motive, capability and enablement mean nothing.
Motive can be found in where your heart is, and in your business, where is that heart? It is where your profit is; it is what you have told everyone what is most important in your business.
And there are right and wrong motives. The right motive magnifies and compounds competitive strength, whereas the wrong motive disperses and neutralises that strength.
If you choose profit, in whatever form it may be expressed, as your motive, you will seed self-interest, politics and short-termism. It is the wrong motive and will lead everyone to be focused on delivering the number that that profit is expressed in, ignoring all consequences.
But if you step away from that profit and accept that it is an outcome and not a catalyst, then you have opened the door to unleashing the real potential residing in your business.
No matter what your business is, the right motive is ‘to compete’, that is, for your business to be its very best every day and to seek to do that ‘better every day’.
Your profit and your heart should rest in doing your very best, and then capability, enablement, and strategy will shift to leveraging and compounding that very best. And the result will be outcomes that you never thought possible.
In every business, there is a competitive engine that sets the floor and ceiling to the performance, and therefore success, of your business. Recognise this engine, understand its ten elements, learn how to influence them, place them in their right character, and everything that has held your business back will disappear.
In your business, you want your heart to be in competing to your greatest capability and knowing that then ‘your profit’ will be delivered to its fullest potential.
An entirely new level of performance.
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All the best in the success of your business,
Richard Shrapnel
