To always focus on profit is not always profitable, according to new study

Being result-driven is of course a good leadership quality. However, being too focused on only making a profit may lead to big problems, according to a recent study…

As a manager, you are likely to recognise having a dual role. On the one hand, you need to live up to the owners’/management group’s demands on showing results (i e profit!). On the other hand, you need to consider the needs and wishes of your employees. Being loyal both ways may cause you to stumble, as the balancing act becomes too challenging when, sometimes, the profitability of the company takes precedence over the well-being of your staff.

It is exactly this phenomenon that a team of researchers at Baylor University, US, claim to be the first to have studied. According to the scientific internet site Science Daily, the researchers studied 886 people, half of whom were managers and the other half their staff. The subjects were from different professions, for example finance, health care, sales, law and education.

The researchers first tested everyone’s “bottom line mentality” (BLM), i e how important they considered the company/department profitability. Those who ranked profitability at the top were given a high BLM score and those who considered other values (work environment, health, ethics, etc) equally important or more, were given a lower BLM score. The managers’ scores were then compared to the actual workplace performance and to the rating given by the staff on the managers’ ability to cooperate, the relationship with them and how they rated their managers in general. And the conclusions are far from flattering for the managers who focused all their efforts on creating a profit:

• Managers whose main motivation was profit (high BLM score) were increasingly met with mistrust and a lack of respect by their employees.
• Employees working for these managers held back in their work roles and ended up doing as little as possible.
•The relationship between profit-driven managers and their staff was considerably worse than average.

Matthew Quade, who led the study, expresses himself quite dramatically about these results:

– It turns out that managers who only focus on profit at the expense of other more important aspects, for example the well-being of their staff and that they care about their work environment and ethics, are downright damaging for their employees.

The researchers have put together a few words of advice for the profit-hungry managers:

• Understand that there are other values in the workplace: what the work environment looks like, the health and happiness of the employees, the company values and ethics. These are just as important as making the staff think and breathe profit.
• If you still insist on singing the profit gospel, at least realise there may be a price to pay.

Obviously, managers do have to show positive results, otherwise they will not last long. But I think you will agree that there are some ways that are better than others when it comes to how you embrace this task…

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