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Should money be your company’s goal?

penniesThe Theory of Constraints holds that “the goal” of for-profit businesses is normally to make money both now and in the future. That’s certainly the case for most companies that I work with. But not always – there are successful businesses where money is not the goal.

Note here that I’m talking about goals – the result we are aiming to achieve – not about mission or purpose. That’s a discussion for a different day.

This discussion might be obvious for not-for-profits where the goal is philanthropic and making more money (obtaining more funding) is just a necessary condition. But there are for-profit companies that take this approach too.

Of course, many Japanese companies, like Toyota, have security of employment as a goal. But I recently had the delightful experience of working on a growth strategy with a successful US company that shares that same goal.

The shareholders view employing good people and providing financial security as the primary goal. Of course,they understand that to meet that goal, financially success(making money) is a necessary condition. They know that customers must be delighted in order to make money. They also know that it takes effective, committed employees to create the products and provide the service required to delight customers. And employees are much more likely to be effective and committed when they know they have secure employment. It’s a virtuous circle that has served them well for decades.

Am I suggesting that other companies can or should do the same thing? No – Dr. Goldratt had it right when he said that the goal of a business is ultimately whatever the owner chooses. However, to be effective for the long term, your strategy must include all three elements: financial growth, delighted customers, and effective employees.