Why Do Some Companies Put Profits Above All Else?
All too frequently we hear horror stories about companies that
- Provide horrible customer service,
- Don’t take care of their employees, or
- Hurt the environment.
Pure and simple, the reason is greed – the all-consuming drive to increase executive compensation and “shareholder value”. For example,
- From 2000 to 2007, investment firms and mortgage lenders decided to make as much money as they could in the housing market (see Wikipedia for specifics). With the help of a complicit Congress, they relaxed lending standards and cajoled millions of unsophisticated consumers into buying more house than they could afford. Foreclosure rates exploded, and the worst financial crisis since the Great Depression resulted. Many Americans are still suffering.
- Wells Fargo employees falsely opened over a million unauthorized accounts in customers’ names. The bank profited while customers suffered.
- In 2016, Mylan increased the price for the EpiPen from about $100 to $600. There was an immediate outcry. Many people who needed the EpiPen could no longer afford it.
In all three instances, greed was the motivating factor.
Some Companies Care About More Than Just Profits
Fortunately, more and more companies are saying NO to excessive greed. These companies operate by a different set of rules.
They are known for:
- the valuable products and exceptional service they provide to their customers,
- the pay and benefits they provide for their employees, and
- the policies and processes they implement to minimize damage to the environment.
They do all of this without sacrificing profits.
How Do They Do It?
It starts at the top. The owner and the executive team are committed to creating this type of business. They don’t just write a mission and values statement, they live it.
They focus on hiring the right employee for each and every position. They hire people who are passionate about their work, and they empower them to do their jobs right.
They value their employees and compensate them fairly.
The executive team models the behavior they expect every employee to have. From the president down to the lowest paid person, the goals are the same – make great products, care about your customers, protect the environment, and invest in your community. Vendors are held to the same standards.
What Are the Results?
- Happy customers, who often turn into raving fans
- High employee satisfaction, which leads to low turnover
- Recognition for the way they respect the environment.
- Profit for their stakeholders.
Three examples of companies which operate in this manner:
Interface is the world’s largest designer and maker of carpet tile for commercial and residential applications. Ray Anderson started the company in 1973 and remained chairman until his death in 2011.
In its early years, the way Interface manufactured its products was plundering the earth. The tiles were made almost entirely from petroleum. Nasty chemicals were used in the dye and glue. The manufacturing process caused black soot to spew from its plants’ smokestacks.
In 1994, Ray realized the environmental damage Interface was causing. He committed to changing Interface’s manufacturing process. By the year 2020 they would be taking nothing from the earth that could not be rapidly replaced. There would be no greenhouse gas emissions or waste.
That was a radical shift for a carpet manufacturer. Ray religiously followed through on his commitment. By the time of his death, he was considered America’s greenest businessman.
Interface has continued to follow through on Ray’s promise. They expect by 2020 they will be taking nothing from the earth that can’t be replaced rapidly.
Recreational Equipment, Inc. (REI)
REI is the largest consumer cooperative in the United States. It sells gear for a wide range of outdoor activities from camping and backpacking to cycling and staying in shape.
The coop’s motto is “we believe that a life outdoors is a life well lived.”
It starts with employees. The majority they hire not only participate in outdoor activities. They also love the outdoors. The coop offers them an excellent benefit package. It supports outdoor activities by giving each employee one day off every 6 months to get outside and play.
The service REI’s employees provide to its customers is legendary. They go out of their way to respond to any customer’s request.
A major company focus is on environmental causes. Each year it donates millions of dollars to conservation efforts in the US. Its employees and customers volunteer for various projects – building trails, cleaning up beaches and restoring natural habitats.
Ben & Jerry’s
Ben & Jerry’s makes ice cream but is so much more. Right from its start in 1978 the company had three objectives still in place today:
- Make the best ice cream possible,
- Do good through their business, and
- Have fun.
The company only uses wholesome ingredients in their products. Its manufacturing processes respect the earth and the environment. Its business model promotes sustainable, financial growth to increase the value for its stakeholders and to expand the opportunities for development and growth of their employees. All the while Ben & Jerry’s seeks to improve quality of life throughout the world.
Customers rave about their ice cream. Employees rate the company as an outstanding place to work. Ben & Jerry’s also has the distinction of being a certified B corporation.
The Sustainability Movement
More and more companies are joining the sustainability movement. They have adopted the triple bottom line concept: People, Planet, Profit.
- People — does your company treat people fairly? The idea is that everyone counts, not just the owners.
- Planet — does your company care about the environment? Empty sloganeering and greenwashing won’t cut it. Results will.
- Profit — how profitable is your company?
For more information about the triple bottom line, sustainability, and doing well by doing good, check out
Ultimately, We All Have a Choice
Your business can solely be about profit. Alternatively, you can become a driving force for good, and add people and planet to your bottom line.
The choice is yours.
- Should You Scale Your Business? - July 17, 2019
- 15 Tips to Protect Your Small Business on the Internet - May 30, 2019
- Bright Shiny Object Syndrome - May 17, 2019
- Interview with Cecelia Hamilton - April 8, 2019
- Helped Beverage Startup Go to Market - March 27, 2019
- Helped Medical Association Save Millions - March 24, 2019
- Questions to Ask Yourself Before You Hire a Consultant - March 21, 2019
- Recession Proof Your Business - February 9, 2019
- Interview with David Johnson - January 7, 2019
- Sell Your Business For More - December 5, 2018