Your Role as a Manager: Balancing People &Profits

As a manager, you can distil your role into two core responsibilities: People and Profits. Nearly everything you do falls into one of these categories.

Profits

First, let’s address ‘Profits’, a subject that can sometimes spark debate.

Every company must eventually stand independently and become self-sufficient by generating profits. This not only keeps shareholders happy but also ensures the company’s survival.

Even businesses fuelled by investment capital eventually face a day of reckoning when the investment flow slows. They must look inward and ask a critical question: ‘Can we cover all our costs with the money we make?’ When the answer is ‘No’, it brings fundamental business practices into sharp focus, often leading to efficiency measures (commonly known as ‘layoffs’). At the very least, striving for profitability extends the company’s runway with available resources.

A value-centric business, often supported by investors, typically strives to catch the eye of potential buyers. Most prospective purchasers are searching for a profitable company (or one with a substantial profit potential).

Consequently, focusing on operational excellence and working towards profitability is essential.

People

The yin to profit’s yang is ‘People’. The very definition of a company is something like ‘a group of people working towards a common aim’. People form the lifeblood of any business.

In simple terms, people perform the work that generates profits, and those profits, in turn, provide for the workforce’s well-being. Hence, there’s an inherent link between the two, and an undue emphasis on one often affects the other.

A company cannot amass substantial profits while neglecting its people, and the people must obsess over actions that support the business’s success. An unsuccessful company cannot sustain its workforce.

Daily decisions

Here’s where your role as a manager becomes pivotal. You make daily decisions that maintain this delicate balance by:

1. Cultivating a nurturing culture where the welfare of your people is a top priority. This involves recruiting exceptional talent, fostering growth, and addressing performance issues when necessary.
2. Helping your teams focus on activities that offer the most value to customers. This drives revenue for the company and contributes to its financial prosperity. You do this by helping your teams make decisions that prioritise crucial activities most aligned with business objectives.

Profit-making is not at odds with the well-being of your team; these are not opposing forces. It’s in everyone’s interest to help the business thrive. Striking the right balance may pose a challenge, but it’s essential. The more successful the company becomes, the better it can reward its employees with higher pay, bonuses, promotions, and other benefits. The opposite is also true.

Keeping these two intertwined aspects front and centre when managing your teams is helpful, and encouraging an honest, open dialogue helps them make the most informed choices.