As I hinted at in another post a few days ago, I’ve been wrestling with some personal decisions for the last week and some days. While I continue to think about this stuff, one thing I landed on is a need to reimagine my personal definition of the word “Profit” in 2021, and for the rest of my life.
A Little Bit of Context…
Like many people, I was taught the Business/Finance/Accounting version of the word…
I’ve always taken that definition to heart in terms of my finances, but I’ve never really (successfully) applied it to the many aspects of my life. “What would it mean to be profitable in your life?” That is a question I’ve been asking myself a lot lately, and I want to talk to you about where I’m at regarding my answer right now.
Expanding Profit Beyond Money
I think that people can calculate profit on just about anything now. You just simply have to ask yourself, “Am I getting more out of this than I’m putting into it?” Looking at the word that way kind of opens new doors for me and objectively makes a better argument for my definition of “Success” (which I like).
You see, I never stopped success at mere monetary gain — money comes and goes. True success to me just means that you’re happy and have peace with the decisions you’ve made and the life you’ve lived at the end o the day. You don’t regret not putting your efforts and energies into the right place. All of THAT is true success to me.
And I question whether or not I should be using the term “Return on Investment (ROI)” here or not, but I think that Entrepreneur does a better job summing that up than I ever could.
I’m looking at this in term of active/current performance, so I think “Profit” is where I want to be.
How Do I Apply This Broader Definition?
I’ve always liked to look at things in terms of my mind, body, and spirit – so, that’s where I take this newly acquired perspective.
When I look at the time I spend reading and learning new things, am I profiting from that at the end of the day? Do I really learn something new from the content I’m consuming, or am I just rehashing a bunch of information I already know? If I manage to learn something, I look at that exercise as profitable. If I don’t – it was a bust.
When it comes to my workout regimen, is that time well spent? Is it getting me closer to my health goals? Is this making me stronger or is it damaging my body (e.g. bad back, torn muscles, general fatigue, etc.)?
Is the time that I’m spending in any activity building up my spirit in a positive way, or is it bringing me down? How did those 8 hours I just spent working for my employer leave me feeling at the end of the day? How does the time that I spend [insert activity] leave my spirit feeling? Is it pushing me further into positive territory, or pulling me deeper into the negative zone (not the one from Marvel Comics lore — congrats if you get that reference)?
You get the point, right? This is versatile in the sense of the word now actively asking me to assess my activities and their impact on my day-to-day.
Ultimately, I think that this new “redefinition” will lead to better assessments of the value of certain things I participate in, and will also lead to better decision making. Money is great, don’t get me wrong! But, money isn’t everything. It doesn’t take a genius to know that, but now I feel like I’m arming myself a little bit more objectively-speaking (which, again, I like).
Is The Business Definition of Profit Outdated?
While I don’t see businesses ever walking away from profit as a measure of performance, I do think it’s original definition is a little archaic for the times because, by definition, it’s only looking at monetary gain.
Old school business, while efficient, was a little heartless and soulless.
I don’t think companies without a heart or soul really do that well competing these days.
That said, it may be time for them to expand their definition to include the people aspect of their organizations, because the employees matter a little more now than they used to. If you’ve had a record quarter of you revenue beating out your expenses, but your company’s morale is severely struggling – are you really “profitable” (yes, you are – but no, you’re not)?
I don’t know how to concretely account for the value of employee morale or the expense of working your best people into the ground, but those things should be evaluated somehow. There should be some line of sight on your companies “Expanded Profitability” (which I’ll likely now coin this term as).
How do you look as a whole when you factor in the value of all of the intangibles that comprise your company’s culture vs. your monetary activity? That would be a better modern definition in my view for businesses who aren’t just trying to make money, but are seeking out true success (as I see it).
With that, I’m done.
What do you think of this “new definition” of Expanded Profitability? Do you think I’m on to something, or am I just off base with this one? Share your thoughts in the comment section below.