02 Mar #110 – Integriosity – What About Profit?
ESSENCE: Profit is NOT bad. In fact, we believe PROFIT IS NECESSARY for an organization (other than a non-profit organization) to be obedient to the Creation Mandate, because it is necessary for sustainability, for the flourishing of owners and to further the bigger “WHY” of the organization. However, in order to faithfully “do right” and pursue “business a better way”, an organization must put profit in the proper perspective–as a means rather than an end. Like a person, an organization can have only one ultimate ambition–one ultimate identity–one true “heart”. Without intentional leadership, that heart will be profit over people–“business as usual”.
In the last few posts, we have talked about “profit” and “financial return” being necessary for good stewardship, always referring to a post we did awhile ago. We thought it would be a good time to bring that post back as a refresher–with a few updates. Profit is not bad. Financial return is not bad. Let’s recall the issue.
For quite a few posts, we have been exploring the implications for work and business of several first principles embedded in Integriosity®: Righteousness (posts #040-#044), Kingdom (posts #045-#052) and Love (posts #053-#058). At this point (or a long time ago), you may be asking “That all sounds wonderful and Godly and caring, but let’s get real–what about profit?“
That is an important question, and its answer flows from post #058 (Respect and Sustainability–God’s Limits) on the respect and sustainability aspects of Love inherent in the Creation Mandate. Profit is NOT bad. That bears repeating–PROFIT IS NOT BAD! Deuteronomy 8:18 tells us that wealth is a gift from God:
You shall remember the LORD your God, for it is he who gives you power to get wealth, that he may confirm his covenant that he swore to your fathers, as it is this day.
In fact, we believe PROFIT IS NECESSARY for an organization (other than a non-profit organization) to be obedient to the Creation Mandate. However, as we have emphasized in earlier posts, in order to faithfully “do right”, an organization must put profit in the proper perspective–as a means rather than an end.
Love Through Sustainability–The Role of Profit
If the leaders of an organization want to be obedient to the Creation Mandate, they must recognize that they are stewards of the organization. As stewards of an organization that belongs to God (He owns everything), one of their responsibilities is to keep the organization viable so that it can pursue its God-given purpose.
Done rightly, business allows us to create the solutions to the material challenges of human life, and the economic prosperity that makes those solutions affordable and accessible in a way that cares for all creation. It also offers jobs–vehicles for people to fulfill their humanity and purpose by living out Imago Dei, the Creation Mandate and the commandments to love God and love each other through service. This is where the role of profit comes into play.
Profit is necessary for a business to be a sustainable enterprise. Without profit, a business will lose access to one of the four types of capital on which a business relies–financial capital (post #014 describes the four types of capital). Without profit or access to financial capital, the business is likely to be unsustainable.
Profit is necessary for the flourishing of owners. In prior posts, we have talked about the importance of a business faithfully “doing right” promoting and facilitating the flourishing of ALL its stakeholders, and that includes owners. A business faithfully “doing right” needs profit in order to permit its owners to flourish. If owners who support “business a better way” are not flourishing by earning a fair return on their capital, they may transfer their ownership to owners who force a shift to “business as usual” (including Profit as Purpose).
Profit is necessary to make the God-given purpose of the business possible. A business can only pursue its bigger “WHY” if it is a sustainable enterprise. In the words of David Packer, co-founder of Hewlett Packard, “Profit is not the proper end and aim of management–it is what makes all of the proper ends and aims possible.” A business that is “out-of-business” is not promoting or facilitating its bigger “WHY”.
The Proper Role of Profit
Profit is necessary for leaders of a business to be obedient to the Creation Mandate in stewarding the business, but profit must be kept in its proper role. As we have emphasized in prior posts (e.g., post #013,) Profit as Purpose is one (and the most important) of the four key aspects of “business as usual” that lead to its brokenness.
One of the most helpful ways we have heard to understand the proper role of profit in a for-profit business is to compare it to the proper role of donations in a non-profit organization. It would sound quite strange for the leader of a non-profit organization to say that the “end” to which the organization is managed is raising donations. In a non-profit organization, donations are clearly seen as a means (and a very necessary means) to the bigger “WHY” of the organization. Without donations, the non-profit ceases to be able to pursue its real “end”–it lacks sustainability. We believe leaders who want their business to faithfully “do right” need to view profit in a similar light.
Profit is not the proper end and aim of management— it is what makes all of the proper ends and aims possible. (David Packer, co-founder of Hewlett Packard)
Things Profit Can’t Be
In describing the role of profit in an organization, leaders sometimes characterize the role and priority of profit in ways that sound good but are not in line with Biblical principles or reality.
Profit cannot be one of several “ends”. Some organizations say that they serve “social” ends as well as profit. The B-Corp model (“benefit corporation”) even requires a company to articulate a social purpose it will pursue along with profit and, in some states, subjects its pursuit of the social purpose to government accountability and even shareholder lawsuits (we have talked about the problems with B-Corps in several posts, including #017). A Biblical principle is that only one “end” is the real “end”. (“No one can serve two masters“, Matthew 6:24). The goals and priorities described as other “ends” of the organization (e.g., treating people well) are likely just means to the real “end”, which means they will be sacrificed if they no longer serve the real “end” or if they jeopardize the real “end”. Leaders who want their organization to faithfully “do right” must get honest about the real WHY of the organization. To faithfully “do right”, we believe that “end” can’t be Profit as Purpose.
“Profit as Purpose” cannot be transformed into a bigger “WHY”. Some leaders try to add some “faith” to an organization that is conducting business as usual (including having Profit as Purpose) in order to look like there is a bigger “WHY”. As we described at length in earlier posts, what we call The “Add Some Faith” Pill can deceive a leader into believing that the integration of faith and work is principally about sprinkling some “faith” pixie dust over the organization to make it look and feel “Godly”–and that leads down the Side Road of Cosmeticizing. These leaders can think they have created profit with a “higher” purpose, but Side Roads keep the leader and the organization off the ancient path to business a better way.
Biblical sustainability is about faithfully “doing right”, and that requires understanding the necessity as well as the proper role of profit. Like a person, an organization can have only one ultimate ambition–one ultimate identity–one true “heart”. Without intentional leadership, that heart will be profit over people–“business as usual”. In the words of Max Depree:
Unless somebody articulates something different, you are going to adopt a secular standard without even thinking about it.
We believe it is time for I in alignment with Biblical values and priorities–it is time to begin faithfully “doing right” through Integriosity®.
PERSONAL NOTE (from PM): It was in preparing a 2012 presentation on “Ambition and Life Choices” for a Priority Associates event in New York City that I first began to think about the implications of Matthew 6:24 to my own life. It was the first time I began to think deeply about “identity”, particularly my identities. I came to realize that our self-worth and value is wrapped-up in whatever we see as our primary identity.
Before becoming a follower of Jesus, I had several primary identities: Harvard student, Harvard Law School student, lawyer at a prestigious “Wall Street” law firm. My primary identity was how I answered the classic American cocktail party question: “What do you do?” I also came to see how Matthew 6:24 applied to my identities–a person can only have one primary identity, and they will sacrifice their secondary identities to ensure success in their primary identity. This came into sharp focus when a new important identity was introduced into my life–“Christian”. I think many people who call themselves Christians WANT to have more than one successful identity, and more importantly, sincerely believe they CAN have more than one successful identity. I wanted to be a “successful” Christian and a successful lawyer. Like many (most?) people, I wanted it all. I came to realize that only one identity can be primary–the one I will pursue at the cost of the others, if necessary. Sadly, I believe many followers of Jesus, consciously or unconsciously, hold WHAT they do above WHO they are. Which identity will you compromise for “success” in the other?