Alien versus Predator 2; Profit taking versus social enterprise

“For a profit maximising company, the bottom line is how much money you make. But when you run a social business, it’s about impact.”

Mohammed Younis

For a publicly listed company there is a legal obligation on the Board of Directors to act in a way that will maximise the return on investment to shareholders i.e. profit.

For any shareholders who seek a long term return on their investment – rather than quarterly profit taking – then ‘impact’ (net ‘good done’ in the community as the result of the company’s actions) will be more or less synonymous with profit.  In a perfect world, companies that do bad things in the name of profit will only derive those profits in the short term.

Every company I have ever worked in (I have not worked in any PLCs but have worked in profit and non-profit distributing businesses) there has been a real concern both for social impact and for making a sound return on investment.

The sense of dynamic balance has been vital.  It is not profit making OR social impact but profit taking AND social impact that leads to sustained progress.

We can shun the tyranny of “OR” and embrace the genius of “AND” – there is a yin/yang dynamic; a Zen type ambiguity that can be used creatively.

In my experience it was the companies that traded profitably and used those profits transparently and accountably to ensure the sustainable development of the company and is employees that were able to do their best work in the long term.  In the ‘non profits’ too often the development of the business was entirely hi-jacked by the whims of funders and policy makers.

It is possible to find profitable ways to make the world a better place.

People are our Most Important Asset…

That is the ‘espoused’ theory in just about every business I have EVER worked in or consulted for. It says it on the web site and in the annual report so it must be true.

But the theory in practice is usually a very different one.

  • People are a controllable cost
  • People are interchangeable parts – just fulfilling job descriptions
  • ‘Good people’ require little or no management time (“You want me to spend 30 minutes a week looking after our most important asset? Don’t you know I’ve got problems to sort out…Any way they know what they are doing and wnat me getting in the way…”)
  • ‘Mediocre people’ require little or no management time (“They do a decent job – as long as I don’t expect them to take initiative, make things better or use their common sense”).
  • ‘Bad people’ eat up hours of management time (“I have to be on their backs all the time – the problem is that you can’t sack anyone in this organisation…”)

This theory in action is a little bit like the moonwalking bear. Unless you look for it you won’t know its there.

Sorting out these problems requires a bit of structure, some commitment and a fair bit of courage.

In Praise of Praise – Wally Bock

 Power of Praise

Wally Bock has written a great post on the power of praise in management.  It includes sections on:

  • What we know about praise
  • What we know about how to give good praise, and
  • Why don’t managers praise more?

If you find giving affirming feedback difficult – or just want to get better at it then have a look at his post.