International Motivational Speaker Simerjeet' Singh's Blog

Why Profit shouldn’t be the CEO’s Top Goal

I came across a piece of research that supports my belief that in the long run, it pays (financially and otherwise) to be a visionary and to be a good ‘trustee’ for all the stakeholders involved.

Here’s the article –

Why Profit Shouldn’t Be Your Top Goal

by Nathan T. Washburn

Making the bottom line your top priority may not be the best way to improve profitability. Recent research shows that CEOs who put stakeholders’ interests ahead of profits generate greater workforce engagement—and thus deliver the superior financial results that they have made a secondary goal.

This finding is based on survey data gathered from 520 business organizations in 17 countries, many of them emerging markets. We were testing the hypothesis that if a CEO’s primary focus is on profit maximization, employees develop negative feelings toward the organization. They tend to perceive the CEO as autocratic and focused on the short term, and they report being somewhat less willing to sacrifice for the company. Corporate performance is poorer as a result.

But when the CEO makes it a priority to balance the concerns of customers, employees, and the community while also taking environmental impact into account, employees perceive him or her as visionary and participatory. They report being more willing to exert extra effort, and corporate results improve.

This research, which was conducted with Mary Sully de Luque, of Thunderbird School of Global Management; David A. Waldman, of Arizona State University West; and Robert J. House, of the University of Pennsylvania, underscores the risk of single-mindedly pursuing profit.

Copyright © 2009 Harvard Business School Publishing Corporation. All rights reserved.

Source – HBR – The Daily Stat – http:// hbr.harvardbusiness. org/2009/12/why-profit-shouldnt-be-your-top-goal/ar/1?cm_mmc=npv-_-DAILY_STAT-_-DEC_2009-_-STAT1201

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