Profit is the result of what a business does, but it is not the purpose.
Businesses spend an inordinate amount of time asking questions about how things are done. For example: How has this been done in the past? How have other businesses done this? These kinds of questions can be a barrier to change and innovation. If a business relies on the past or on other businesses to implement actions, there can be no innovation. For something to be innovative, it cannot be something that has been done before.
Before asking how to do something, it is preferable to ask: What is it we are trying to develop? Then you can ask what can be learned from the experience of other people who have tried to develop the same or a similar thing.
Questions about how to do something must be answered in terms of the vision of the organization and the strategy developed to achieve that vision.
Vision has three components:
Basic principles or core beliefs.
These rarely change. If your business does not have a set of core beliefs, you can either develop them or search them out by meeting among core personnel. Examples of core beliefs include integrity, quality of life, innovation, collaboration, and using the input of others in the organization. These are just a few examples.
What do we do? Who are the beneficiaries of what we do? And how do we do it? Examples of purpose are to help customers improve their business processes, to help customers succeed, and to create an environment in which our teams can be successful.
A goal should be something the team has passion for; something the company can be good at, perhaps the best at, and it should be something that will drive the economic success of the business. Goals should be in alignment with your principles and purposes.
As Jim Collins suggests in the book Built to Last, adopt a BHAG — a big, hairy, audacious goal— such as “crush the competition” or “achieve revenue per employee of $300,000 per year.”
This blog post includes just the highlights of a complex subject. Our purpose is to demonstrate that profit cannot be a goal in itself but a result of having a vision— that is, a set of core beliefs — an overall purpose, and a set of audacious goals. If you would like to explore these concepts in more depth, please contact us so we can help you obtain the right guidance.