A review of The Practice of Management, Chapter 24, The Economic Dimension

“…the real job is to convince workers that there is an ever-present danger of loss, that therefore profit is necessary to build their own future job and their livelihood.”

Many employees, in large organizations, do not believe profit or results are their responsibility. They believe profit is the CEO’s responsibility or a function of the sales or the business development team. This has caused problems. First, employees are not as motivated to perform as they would otherwise be. Second, they do not think about how their work could contribute to profit in a more effective way, or conversely, how quietly quitting affects the enterprise. Third, employees do not look for and take opportunities to contribute.

For employees to accept the fact that they are responsible for profit and results, they must realize that profits come from outside of the business, via markets and customers. They must realize that customers decide what is valuable and worth paying for and that the customer determines the economic future of the employee. An employee who understands this will be more motivated to contribute to what the customer considers to be of value and to the business’s profit.

Executives should find examples of people who accepted responsibility. They should showcase how they contributed to what customers consider value, and how this led to company profit and personal success.

(The Practice of Management, chapter 24)

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