We are told we are in business to maximize profits. The classical economists tell us that’s what our motives as managers are and should be. That is what business is, we are told. Maximizing profits for tranches of faceless shareholders is what’s supposed to get you out of bed — because you’re a manager.
And that creates some anxiety in you because you don’t get out of bed to serve tranche A, B, or C. But you like your job.
You get out of bed in the morning to try new things because you’re a software engineering manager. You look forward to the product your engineers are building. You’re looking forward to expanding the team. You’re looking forward to the six one on ones you’ve got scheduled this week because you want to know what makes your people tick and what’s going to get them out of bed in the morning.
The word “profit” isn’t in your daily vocabulary. You aren’t thinking about maximizing profits while you wait in line at SBUX to order your second venti Americano of the day. Yet, still. You’re a little anxious because you’ve got a lot of “shoulds” floating around in your head all of the time, and “should maximize profit” is one of them (if rarely). And maybe your ideas for increasing the level of craftsmanship on the team actually will cause you to lose a little money this quarter. Does that mean you’ve failed as a manager because you were operating with the wrong rationale?
Of course not. Some will suggest we can resolve the tension by putting qualifications and exceptions on what it means to “maximize profit.” We could think long-term profits, not quarterly profits. Maybe we should redefine “profit.” Maybe we should expand who’s profiting — our engineers, our community, the environment, the next generation.
But what if we didn’t have to qualify what it means to maximize profit? Instead, what if we thought of profit as not a rationale or a motive, but rather a test — a test of whether your theories or tweaks or 1:1s actually work? What if it was a test of whether you should do more of that thing, less of it, or do it in another way? What if profit maximization was simply a factor — an important, limiting factor, of course — influencing what you do as a manager?
You might still have a little stress about whether your ideas will pass the test, but that’s healthy. And of course there will be lawyering about the definition of the test itself, but at least you won’t feel like your motives are in the wrong place anymore. I hope that brightens your day just a little.
(By the way, Drucker is still potent today. I got most of my ideas for this post from The Practice of Management, a book from 1954 and a century ahead of its time.)