Five perils of pursuing profit-driven success

Today’s business leaders are being limited by a system that considers profits to be a company’s core reason for existing. Although growth and profits are absolutely essential to the success of a company, the real game-changer is how these are achieved. A focus solely on economic outcomes that ignores human needs is outdated. And while CEOs are busy watching their bottom lines, they are missing a golden opportunity to build more substantial and lasting success.
Here are five ways in which companies are negatively affected by pursuing profits over all else:

1. Employee disengagement: Only 29 percent of North American workers are engaged in their work. (Gallup) This means more than 70 percent of the employees a company are mostly concerned with getting by doing just enough to keep their jobs. This hampers a company’s ability to actually grow.
2. Lack of loyalty: Employees and customers reason that if management is willing to sacrifice their interests in order to make a numeric goal why should they be loyal to the company. People are not likely to support a business that puts their interests and livelihoods in jeopardy to meet revenues. This ends up hurting the bottom line because it leads to higher costs associated with new employee and customer acquisition.
3. No lasting legacy: It is increasing difficult for business leaders to both build a financially successful company and leave a positive wake in their paths. But if profits become a CEO’s primary goal, he or she misses the opportunity to build something of lasting value to be remembered, respected and known for.
4. Lack of trust: Trust is eroded when stakeholders believe that company leaders are only focused on short-term decision-making. And while research shows that most executives believe that trust is critical to their effectiveness as leaders, only 18 percent of American workers trust their leadership. (Edelman Trust Barometer) Failing to gain trust of both employees and clients can be the downfall of even the best-intentioned CEO. People are eager to support and rally behind those who demonstrate an interest in the well being of all stakeholders.
5. Derailed strategy: CEOs generally champion long-term strategies but get easily distracted by immediate market conditions. If there is a downturn in the market or the company posts poor quarterly returns, leaders are cornered into a defensive position and pressed for immediate solutions for improving their numbers.

There is a better way for CEOs to drive performance and ultimately profits. It is time to replace the quest for an ever-rising bottom line with a focus on something more human, more satisfying and ultimately more beneficial to a company’s success: purpose.
When stakeholders become emotionally and not merely financially invested in a company there is less cry for quick fixes and more of an inclination to stick with a company through challenging times. A long-term focus that is based on what a company believes in and stands for builds engagement, loyalty, positive legacy, trust and the ability to weather most any storm.
Jackie Dryden, co-author with Bethany Andell of “Get Your Head Out of Your Bottom Line” (www.savagethinking.com), is chief purpose architect with Savage Brands, which works with companies to build purposeful brands. She also is author of “Just Me: What Your Child Wants You to Know About Parenting.”