Make better or make money?
How do you measure your success? How much money you make? Or how much you make the world a better place?
Capitalism is a driving force of our societies, and like any force it has a Light and a Dark side.
- The Light: Bring products and services to people to liberate them from material constraints and help them seek the lifestyle they want
- The Dark: Extract value from anything you can grasp to make more money for yourself
The Light side treats ideas like young shoots that need to be nurtured so that they can bloom into full-scale innovations which will make the world better by both 1) being useful and 2) benefitting society. To do so, it is necessary to build, and yes, fund the processes that will turn ideas into realities – money is a mean to betterment.
The dark side treats existing processes as the opportunity to extract more financial value out of other people’s efforts, either by being clever with refinancing schemes, manipulating markets or brutal productivity pressure.
The light side treats clients, colleagues and contractors as friends that need each other’s support to succeed together in a joint project.
The dark side treats others as tools to be used in order to maximize the money that can be made out of the deal.
Cash is the lifeblood of the capitalist system – it’s what flows from what people value (they pay cash for it) to work (people get paid cash to work) to investment (cash is used to buy stuff no individual person could afford) and fund innovation (cash spent with no immediate purpose in the hope of something grand later). Profitability is sanity – if an activity can’t be shown to hope to be profitable at some point, is it worth doing?
In many cases, of course it is – it’s a matter of finding how. The human spirit is precisely about creating stuff: art, devices, stories. Funding is simply a mechanism.
People often ask me: Why do you dislike consultants so much? Don’t you consult yourself?
I don’t dislike in the plural – I have nothing against consultants in general. I strongly object to moving into teams, getting more productivity from their work, and getting one’s cut out of it and then moving on to the next project, without having added an ounce of value.
The same goes for financiers. Of course it makes sense to refinance companies to help them grow and bring better products or services to their customers. But so many deals I see now are about using the company as a black box to gamble on markets – break it up, sell the pieces. Add pieces together to create a semi-monopoly and the appearance of sales growth to support the share price. This is not creating or even adding value. This is extracting value by gaming the system.
I don’t intend to sound holier than thou, I have made plenty of mistakes myself, both unwittingly and, worse, sometimes knowingly. It’s hard to resist the push to measure every success by how monetized the activity can be (profitable hospitals? Come on!) But at least we can take a hard look at what we do. As a result of any managerial action:
- Do customers feel better about the company, are people more confident, knowledgeable and better at working with each other, are products better with new ideas being made into concrete features? Have you produced reusable knowledge that can be of help to others?
- Has customer churn increased, do teams feel more demoralized and helpless, has the product or service deteriorated and investment in new ideas stopped? Do you keep mum on all your precious secrets to keep gaining advantage?
Making the world a better place is the goal, not making money – that’s just the means. To make the world a better place we’ve got to roll our sleeves up and actually contribute something of value, not just run things so others do, and certainly not extract more without growing the company from within. Yes, this is a moral stand. Yes, it’s easy to fall short, particularly in today’s context, but hardship is not a reason to give up altogether. Yes there is a Light side and a Dark. And we can choose.