There’s a single point I make throughout my work in executive coaching, speaking, and writing: people are the most important asset of any business. Most people agree, at least on the surface. But too few are willing to carry out that principle in policies and day-to-day management.
I recently conducted a study of my clients with for-profit businesses and found that most understand the importance of people but still put profits first. Even though the study’s results were not surprising, they were extremely disappointing.
It’s easy to say that you need to focus on profits to survive. And that’s especially true in a difficult economy. But that focus comes at a high price that may jeopardize your longer-term success.
Here’s what happens when you put profits first:
Innovation is stifled. When a company focuses entirely on the bottom line, talent is seen as expendable. Innovation happens when people feel appreciated. When they know you’re willing to invest in their contributions, they give their all. When you treat them as a budget line item, they do the minimum. They’ll save their best ideas for someone who appreciates them.
Reputation erodes. In the past, companies could treat their employees poorly and few people would even know. Today, your employees’ experiences are likely available to anyone online. When those experiences are poor, your company’s reputation suffers. Prospective employees and even clients and investors will avoid a poorly rated company.
Retention suffers. People used to stay with poor employers just to have a job. But with historic low unemployment rates, retaining employees has become much more important. Most people in your organization have other options. And when they leave to pursue those options, they won’t be easy to replace.
Engagement is lacking. Unengaged employees aren’t motivated. They rarely go the extra mile, and they have more absences and less loyalty. High sales and revenues require engaged employees working hard to meet the company’s goals. An engaged workforce is one of the most valuable resources you can have—and its absence causes real harm.
Risk increases. It’s hard to manage risk when your people are poorly trained, constantly stressed and unhappy. Bringing in new employees through a revolving door adds to that risk. Accidents, mistakes and work stoppages become part of life. When an employer fails to provide adequate training and reasonable work conditions, they put the entire company in jeopardy.
If any of these issues is a problem at your company, it’s likely that profits are being put above people. As a leader, you’re charged with fixing that mindset within the scope of your influence. If you’re an owner, executive, or board member, work for company-wide change. If you’re in middle management or supervision, do whatever you can to advocate for your employees and show the benefits.
Lead from within: Challenge yourself today to begin correcting one instance of putting people over profit, and build on that momentum tomorrow.
#1 N A T I O N A L B E S T S E L L E R
The Leadership Gap
What Gets Between You and Your Greatness
After decades of coaching powerful executives around the world, Lolly Daskal has observed that leaders rise to their positions relying on a specific set of values and traits. But in time, every executive reaches a point when their performance suffers and failure persists. Very few understand why or how to prevent it.
Additional Reading you might enjoy:
- 12 Successful Leadership Principles That Never Grow Old
- A Leadership Manifesto: A Guide To Greatness
- How to Succeed as A New Leader
- 12 of The Most Common Lies Leaders Tell Themselves
- 4 Proven Reasons Why Intuitive Leaders Make Great Leaders
- The One Quality Every Leader Needs To Succeed
- The Deception Trap of Leadership
Of Lolly’s many awards and accolades, Lolly was designated a Top-50 Leadership and Management Expert by Inc. magazine. Huffington Post honored Lolly with the title of The Most Inspiring Woman in the World. Her writing has appeared in HBR, Inc.com, Fast Company (Ask The Expert), Huffington Post, and Psychology Today, and others. Her newest book, The Leadership Gap: What Gets Between You and Your Greatness has become a national bestseller.