By Ed McLaughlin with Wyn Lydecker
Since the financial crisis and Great Recession, “profit” has become a bad word. Is the pursuit of profit wrong?
Critics maintain that when a company puts profit above all else, only distortions can result. Owners enrich themselves on the backs of customers, vendors, and employees, eventually leading to negative effects on the company, the economy, and society at large.
But not everyone would agree. One of Wyn’s favorite thought leaders, August Turak – author of “Business Secrets of the Trappist Monks” – wrote in his 7/14/13 Forbes.com column, “Bill Gates and Me: The Myth of Corporate ‘Give-Back’,” that profit has a multi-faceted upside. Turak listed seven reasons why the millions of dollars of profit and wealth Microsoft has generated is good.
In fact, Turak said he was grateful for all Microsoft had enabled him to accomplish. He claims he never could have started, grown, and sold his own successful business had it not been for Microsoft’s software. Turak was able to bootstrap his company partly because of the inexpensive technology that was available.
I agree with Turak. Profit can create great good. When a company creates value for its customers, money flows back to the company in return. When an entrepreneur organizes his or her business around profit, founders, partners, and employees can all share the rewards that result from their hard work and the value they created. All are better off.
Profit enables an entrepreneur to achieve organic growth, hire people, fuel R&D, and contribute to the local and national economy.
Profit also enables philanthropy. I’ll write more on that topic – a particularly important one in this season of giving – next week.
“The Purpose Is Profit” is scheduled for release in summer 2014.
Copyright © 2013 by Ed McLaughlin