Profit: a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
But when you examine how profit is actually calculated, you discover that there is no mention of environmental cost, human cost or community cost. Should there be? Is business responsible for the impact of what it produces beyond its profit/loss statement and balance sheet?
Focus in on just the human cost for a moment. Cost of Goods Sold, Direct costs, Indirect costs … None of these include the cost to the humans hurt, injured or burned out in the process of creating the products or delivering the services that an organisation does for profit.
Should it? Should business be responsible for the wider – full – cost of the operations it undertakes?
Who cares? Why does this even matter?
Because there is a gap in the accounting process
The truth is that if you remove people from most organisations completely, they would be unable to create their products or services.
They would be unable to create value for shareholders. So people are vital in the creation of shareholder value. Why are the costs of people not included in the calculation of the profit of the business that creates shareholder value?
Leaders at all levels in business and business owners themselves are becoming exhausted from working to keep growth continually happening. The cost to themselves, their health, their relationship, their children … is unaccounted for.
And these are the people who become my clients.
But why does this matter?
Unless you are one of the people directly affected, it doesn’t.
Many Big Organisations Have Leaders that Thive
Look at the sorts of companies whose CEOs have publicly said that workers should all return to work;
- Amazon
- AT&T
- Barclays
- Boots
- Citigroup
- Dell
- Disney
- Goldman Sachs
- HSBC
- JPMorgan Chase
- Manchester United
- Salesforce
- Tesla
- X
These are huge organisations. I don’t know any of the CEOs of these companies personally, but I imagine that they are the sort of people who thrive on endless pressure and deadlines and continually being on. Forgoing holidays, missing family events, taking work home, always being available on the phone and email; presumably these people have been able to make life work in spite of these sacrifices.
But that’s not true of everyone
These people have self-selected for being able to cope – thrive even – in these working conditions.
The rest of us are less resilient, less tolerant, frankly, less committed to the business. For us, burnout is a real risk. And companies do not have to account for the hidden cost to their people of continual growth and always-on.
Do you think that this is a problem? I do.
I don’t know the solution.
But since the industrial revolution, business has been able to not care. It doesn’t matter. It’s invisible in the accounts. Business as usual chaps.
But I suspect there may come a point where it suddenly does matter. It’s going to matter a whole lot to a whole lot of us. And it could be too late to fix it then.
I’d welcome your thoughts on this, comment or DM me.
If you’d like to check-in on how you are faring yourself in your career or business, do a confidential self review in 15 minutes with this Career and Life Assessment activity.
Neil Lawson went from a burned-out corporate IT senior manager to serial business owner and explorer of wonderful, fun ways to live in the 21st century.
He now coaches other business owners and professionals to navigate that for themselves too. DM him, or check out the free resources for managing yourself well at https://neillawsoncoaching.com/free-resources/
