The Profit Problem: Why "More" Isn't a Strategy
I listened to a podcast this week that reframed something a lot of us take for granted: the idea that maximizing profit is the goal of a business. The conversation, episode 272 of Patrick Lencioni's At the Table, made a distinction that sounds obvious once you hear it, and yet most leaders were never actually taught to make it: profit is an indicator that an organization is succeeding. It is not the reason the organization exists.
I've spent two decades doing ethics and leadership work, mostly in healthcare but also with government agencies, higher education, and private businesses. And I'll tell you, this confusion shows up everywhere, just wearing different clothes. A hospital talks about mission and community benefit. A county agency talks about public trust. A business talks about growth. But when a hard decision comes down to the wire, the question underneath it is almost always the same: is the number a signal we're doing our job well, or has the number quietly become the job itself? That distinction is worth slowing down on, because most organizations cross the line without ever deciding to.
A Signal, Not a Destination
A fever tells you something is happening in the body. It's useful information. No physician treats "get the temperature as high as possible" as a goal, because the fever isn't the point. It's a signal pointing at something else, something that actually matters.
Profit works the same way. It tells you the organization is creating something people are willing to pay for, that operations are sound, that the model holds up. That's real information, and leaders should pay attention to it. But the moment profit stops being a signal and becomes the target itself, something subtle happens: people start optimizing the number instead of the thing the number was supposed to be measuring. And an organization can do that for a long time before anyone notices what's been lost.
How the Shift Actually Happens
I don't think most leaders wake up one day and decide profit is the point. It happens gradually, usually through a series of individually reasonable decisions.
A county office trims a service that helped a small number of residents because it doesn't move the budget needle. A hospital system quietly lets throughput targets shape clinical scheduling in ways that were never explicitly approved. A family-owned business takes private equity money, and within eighteen months the founder doesn't recognize the place anymore. None of these are villain moments. Each decision, in isolation, had a defensible rationale. But add them up over a few years and an organization can drift a long way from what it originally set out to do, without a single meeting where anyone said "let's make profit the goal now." That's what makes this hard to catch. It's not a decision. It's an accumulation.
Three Questions Worth Asking Yourself
Instead of a checklist of symptoms, I'd rather offer three questions. If you're a leader, sit with these honestly.
When was the last time you made a decision that cost you money on purpose, because it was the right thing to do? Not a PR move. Not something with an ROI story attached. A genuine choice to absorb a cost because it served people, even though it didn't serve the number. If you can't think of one recently, that's worth noticing.
Do the people you serve, whether patients, customers, or constituents, experience your organization as something trying to help them, or something trying to extract from them? You already know the answer if you're honest. The people on the receiving end usually figure this out before your dashboards do.
If someone asked your employees why the organization exists, would they describe a purpose, or would they describe a number? This is the sharpest test I know. An organization that has lost the plot usually has employees who can recite the revenue target with more confidence than they can recite the mission.
Say the Quiet Part Out Loud
Here's a point I don't think gets made often enough: having profit as a genuine core value isn't automatically a problem. Some organizations exist primarily to generate a return for their owners, and there's nothing dishonest about that as a stated purpose. The dishonesty shows up when an organization claims to be values-driven, plural, but when it actually comes down to a hard tradeoff, only one value ever wins the tiebreaker. I've sat in enough boardrooms and leadership retreats to tell you that people can feel this gap even when nobody names it. It shows up as cynicism, disengagement, and a quiet sense that the mission statement on the wall is decoration.
If profit is genuinely the reason your organization exists, say so, clearly, to your employees and the people you serve. Let them decide, with full information, whether that's an organization they want to be part of. What erodes trust isn't the presence of a profit motive. It's the gap between the values on the wall and the values in the decision.
The Harder, Better Question
None of this is an argument against making money. Profit is necessary. It funds the mission. It protects the people who depend on the organization when conditions get hard. It buys the freedom to make good long-term decisions instead of desperate short-term ones. An organization that can't sustain itself financially can't help anyone for very long, and I have real empathy for leaders fighting just to keep the lights on. That's a different conversation entirely.
But for organizations past that point, there's a real difference between a leader who asks "how do we maximize this number" and one who asks "how much is enough, and where do we invest the rest." The first question has an easy, mechanical answer: more. The second question is harder, and it requires actually knowing what you're building the organization toward, then having the discipline to keep asking it even in the years when the number could technically go higher. That second question is the one worth sitting with, whether you're leading a health system, a government agency, a business, or a team of three people trying to do good work together. Growth isn't the enemy. Losing track of what the growth is for is.
This is the kind of tension I spend most of my time helping leaders and organizations work through: clarifying purpose, building the frameworks that keep values operational instead of decorative, and helping teams make the hard tradeoffs before a crisis forces the issue. If your organization is wrestling with this, I'd welcome the conversation. Feel free to reach out.
You can listen to the full podcast conversation that sparked this piece on At the Table with Patrick Lencioni, episode 272.