How Selfishness in Business Destroys Long-term Profits.
- Mar 6
- 4 min read
The essence of business is profit. No one goes into business with the mindset of losing money, going bankrupt, or disrupting their own cash flows. In this noble pursuit of keeping the lights on, business owners, entrepreneurs, and corporations seek out investments from venture capitalists, shareholders, common stock issuance, and even bank loans. All in the pursuit of ensuring their bottom line.
And to a degree, raising capital, growing revenue year over year, and paying shareholders dividends IS the central purpose of a company. But often, this purpose risks thinking too small.
In a frenzy to please the shareholders, corporations co-opt the same strategies, products, and ideas as their competitors, not knowing they’ve already lost before they’ve even started. At this point, it is already too late; the deliverables are half-baked at best and incomplete at worst. The business is now several hundred thousand, millions, or even billions in the hole.
Now the only way to save themselves on paper is to eradicate 20% of the office staff and report increased earnings. Not realizing that doing this is setting them up for significant losses in the following quarter and for years to come.
Selfishness in business hinders entrepreneurship and creative problem-solving.
“Slash-and-burn tactics are merely the quickest way to ‘performance’ in the absence of imagination.” (Mintzberg, Simons, Basu, 6)
Self-interest can work in favor of the business in its initial stages. As the saying goes, “put on your own oxygen mask before saving someone else.”
But when the oxygen mask is being placed over the mouth of the shareholders and the directors, what about the customers, suppliers, remaining employees, and the future of the business? That self-interest resulted in temporary gains, but exponentially expanded long-term losses.
With a slimmer workforce, lowered operating costs, and the same workload expectations, how can a company operate at its initial capacity? This abrupt switch in strategy results in “...burned out managers, angry workers, quality losses in the guise of productivity gains, and disgruntled employees.” (Mintzberg, Simons, Basu, 6)
So, what’s the solution?
Choosing offense first instead of defense.
Thinking only of self-preservation is what leads to the demise in the first place. Copying competitors with a half-baked solution and calling it “innovation”, then being surprised that the solution produced less than stellar results, is exactly what leads a business to make the painfully predictable decision of cutting staff.
How can businesses shift from a defensive strategy to an offensive one?
Stop thinking like a Mega Corp, and start thinking like a scientist.
How to recalibrate scales that tipped too far into self-preservation.
The first stage of recalibration starts by taking a firm look at the divisions that are “eating up the most resources” and observing them without judgment. Bias often creeps in when an internal member of the organization is looking at a division, and oftentimes, office politics may prevent a fair assessment from being conducted. In this circumstance, working with a non-affiliated consultant could be the first step in diagnosis.
Next, all technical areas must be thoroughly assessed.
Questions like:
“Where can automation be added to clear any bottlenecks in our process?”
“Has the AI change management system that we implemented made the workflow faster?”
“Has there been more errors as a result of implementing our change management system?”
“Were the employees adequately trained in these new systems?”
“Has the quality of our product improved after implementing AI into our systems?”
Next, assessing supplier relationships, vendors, and bottlenecks in the supply chain is imperative to determining whether resources are properly being distributed. Make sure to look into marketing divisions, sales teams, and IT sectors for underperforming high-cost initiatives. Ask yourself, “Are there any employees lingering around without much work to do, or who are completing 'low value-added' tasks?
What do we do if we conduct a sweep and don’t “find” anything meaningful?
This is when a creative solution can take place. Try pulling employees with talents for finding unique solutions to their department's problems, and place them into a secondary internal team. On this secondary team, with the help of a facilitator asks them about any interesting developments or ideas they have for a potential new product or service. These suggestions can come in the form of improvements to an existing product, a new operations system, or even a new product or service.
Without extra resource spending, you have created an internal team of scientists tasked with probing into all aspects of the business and finding creative solutions to problems. This sort of model is great because these teams can exist long after the presence of a consultant and conduct themselves as they see fit.
The goal of this approach is to promote more internal entrepreneurship, shift resources to the consistent development of potentially profitable ideas, expand offerings, and promote long term positive cash flow and revenue.
Instead of reacting to the market, your company can actively shape it through an active strategy.
No longer taking the "easy" way out.
This sort of solution may initially be disconcerting to most businesses, because they will not immediately realize profits. This could mean that you might have to report a loss to shareholders initially, which could throw a wrench in capital raising. But any shareholder should know that for a business to grow, it must have periods when money is spent on building new sectors of the business, advancing technology, researching new markets, and even revolutionizing operations.
These periods are typically when the most growth happens, and long-term gains are firmly established.
Conclusion
Before you hit the “delete” button on a significant portion of your workforce, really ask yourself if all avenues were considered. Have you really used every possible resource to its full potential, or did you expand too fast without paying any mind to how these human and technological resources could be utilized?
“We can live our lives and manage our enterprises obsessed with getting ever more, with keeping score, with constantly calculating and scheming. Or we can open ourselves up to another way, by engaging ourselves to engage others so as to restore our sense of balance.” (Mintzberg, Simons, Basu, 6)
Citations
Mintzberg, Henry. “Beyond Selfishness.” MIT Sloan Management Review, 15 Oct. 2002, sloanreview.mit.edu/article/beyond-selfishness/.
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