Looking Long-Term: Emphasizing People Over Profit

Mental Models, Performance, Business & Entrepreneurship | newsletter.scottdclary.com

Aug 16, 2023

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Looking Long-Term: Emphasizing People Over Profit

A ton has been written about the employee experience lately, including in this newsletter. One of the prevailing attitudes of the last decade-plus has been “invest in your people.” The idea is to develop the talent you’ve hired so that they can become the next generation of leaders for your company.

The problem is a lot of that writing is rather disingenuous. It still positions the issue as a business case; develop your people, and you’ll receive an ROI through increased profit.

This isn’t a new emphasis, then, just a different mechanism of industry to try and pry as much money out of the system as possible. It masquerades as a selfless technique but is just the same brand of capitalism with a better marketing spin.

I’m not here to tell you to avoid capitalistic tendencies. Far from it. But after sitting down with Thomas Vozzo, CEO of Homeboy Industries, I’ve started thinking that maybe we need to reconsider how we’ve been defining profit altogether.

Changing the Mission

See, Thomas left behind a well-paying corporate life with Aramark and now helps convicted gang members find stable employment and career growth. It is a massive shift—one that he doesn’t even take a salary for.

He realized during his for-profit career that regardless of whether a company splashed inspirational vision statements across its website, they all shared the same core mission: increasing shareholder value.

That is the true motivation behind every decision, including those branded as “employee-centered.” Sure, it’s nice to think that your team has a more rewarding career path and work-life balance, but too often, those are offered as a means to things like:

Increased retention
Improved recruitment
Higher productivity
Enhanced efficiency

I believe we need to start flipping the priorities. These should be the byproducts, not the expectation. The primary focus should be nurturing our people, treating them with the dignity they deserve, creating a positive work environment, and instilling trust and mutual respect.

Redefining Profit

Maybe we need a new term entirely, but the key thing that I’ve realized is profit doesn’t need to be about money.

You and your company can profit in lots of different ways.

Satisfaction in maintaining an ethical, responsible business
Pride in offering great products or services
Joy in seeing your employees grow and succeed
Fulfillment garnered from building a positive company culture

These are all profits that can't be measured in dollars. Many of them might not even move the needle financially, or perhaps they even cost the company some sliver of margin.

But that’s where the real change needs to come. The balance sheet can’t solely look at financial reports anymore. We’ve come too far, this isn’t the industrial revolution anymore.

Humanizing the Workplace

A 2019 Forbes article is titled "Five Reasons Employees Are Your Company's No. 1 Asset." I've written similar things here, and I'm sure you've heard the Anne. M Mulachy (CEO of Xerox) quote:

"Employees are a company’s greatest asset—they’re your competitive advantage. You want to attract and retain the best; provide them with encouragement, stimulus and make them feel that they are an integral part of the company’s mission."

Notice that? “Competitive advantage.” People aren’t a competitive advantage, they’re people.

We need to stop reducing employees to commodities and start treating them as human beings with their own needs, desires, and aspirations.

Success is when we get them to thrive, not just within the company’s profit margins but as individuals. When their personal growth, their happiness, their health, and their families become as important (if not more) than the bottom line.

Our workplaces should be spaces where people are encouraged to learn, grow, and experiment rather than engines of productivity designed to extract as much value as possible.

The Endgame

My point is that the more we prioritize people over profits, the better our world will become. Not only in terms of economic stability (which is a significant part) but also in the internal richness of a cohesive, loyal, and happy workforce.

We create a legacy not just about figures on a balance sheet but the difference we've made in people's lives. Bottom line: Businesses can—and should—do well and do good, it doesn’t have to be an either/or situation.

So how do we get there? We need to instill three pillars in every company, big or small.

Practices for Prioritizing People

Stop with the empty promises. A healthy benefits package, flexible time off policy, or continuing education budgets are good perks, but just surface-level changes. Businesses must dig deeper to authentically align their practices with principles that respect and celebrate human dignity.

We need to implement real strategies that foster a positive, nurturing environment. These strategies must be built on genuine values that will guide the company.

1. Authenticity

This is where real motives will be tested. If you are authentically invested in your team, it will be evidenced in your actions. Genuine care for the well-being of your employees should take precedence over any other benefit your company might gain from having a happy and engaged workforce.

Authenticity breeds trust and loyalty, fostering an environment that motivates workers to give their best.

In practice, this means being transparent about company operations and decisions, acknowledging employee contributions, and creating an open dialogue. It's about being real, both in success and failure.

If an employee needs time to deal with personal matters, let them—without any strings attached. If someone has done remarkable work, celebrate them openly. In difficult times, be honest about the challenges and involve your team in finding solutions.

2. Embrace Love

For some, this will mean divine love. Thomas was convinced to take the role with Homeboy because he wanted to be closer to Father Gregory Boyle, the founder. He put his own spiritual journey ahead of the salary of his former career.

But for others, it can mean simply respecting and admiring the people around you. This shouldn't be just a vague concept but a lived experience within your business.

Encourage team members to support each other professionally and personally, celebrating small victories and lending a hand in times of difficulty. It also means creating an environment that promotes collaboration and mutual respect, and setting company policies prioritizing human values over profits.

How does this look in practice? It could mean offering mental health days, providing resources for spiritual or emotional growth, or creating safe spaces for open dialogue and sharing. Most importantly, it embeds compassion, understanding, and genuine care into your company's culture.

3. Generosity

No, I don't mean simply offering higher salaries to your employees (though fair compensation is vital).

In this context, generosity refers to creating a culture of giving within the business environment. This can (and should) involve giving back to the community, but it doesn’t necessarily mean you have to become a charity.

It comes down to changing from a extractive mindset to one of sharing. This could translate to profit-sharing schemes, offering your products or services to those in need, or creating opportunities for staff to volunteer or support good causes in their spare time.

Each of these strategies may mean less profit in the short term. But by practicing generosity, businesses can foster long-term loyalty, stimulate creativity, and improve overall happiness.

This does more than just make business sense—it makes a real difference in the lives of your employees and creates a spirit that can ripple out into the wider community.

Business should not be about squeezing as much as possible out of people, but about bringing out the best in them.

Committing to a New Landscape

Three things are written about constantly these days:

Living wage
Flexible scheduling
Upward mobility

These are excellent values for a company to chase. If they offer all three, the culture and success within the company are almost guaranteed.

But it won’t necessarily significantly impact the rest of our world. Thomas’ plea, which I’m now fully onboard with, is for more organizations to provide these things to people who would otherwise not have access to them.

It’s one thing to offer upward mobility to a graduate of a prestigious university. It’s entirely another to offer it to a high school dropout.

I’m not saying every organization needs to rehabilitate convicted felons, like Homeboy Industries, but hiring practices too often target the privileged and overlook those with less traditional credentials or non-linear career paths.

Every company should challenge itself to break the pattern of hiring from the same talent pools and explore the wonders that come from staff diversity in all its forms—race, gender, education, life experiences, and more.

This act of radical inclusivity is the real competitive advantage and is not about the bottom line. It’s about pushing against societal inequities and helping people in real, meaningful ways.

Final Thoughts

It was an inspiring conversation you should listen to fully if you want to hear more of Thomas’ thoughts. Head over to the Success Story YouTube page, where we spoke for over an hour about his journey and how he now frames his mission.

I’m going to keep contemplating how I can prioritize people in my own business and start effecting the change that we all agree needs to happen.

If you enjoyed this article, I’d love to hear from you.

Write me at scott@scottdclary.com or tweet at me @ScottDClary and I’ll do my best to get back to everyone!