Unfortunately, many believe profit is evil. Profit is no more evil than pursuing advanced education or consuming more organic foods. These deal with promoting advancements—the enterprise, careers, and contribution to society, overall health, and well-being.
We should and must strive for profit to build and maintain a business. Profit goes beyond rewarding investors. It provides the necessary capital for investment in research, purchasing resources, fueling innovation, providing marketing support, employment of workers, among other essential functions. And, if you believe in the trickle-down effect of money (i.e., the multiplier effect) as I do, it benefits communities. There’s more money to go around.
The development of the Johnson & Johnson one-shot Covid vaccine is a prominent example of one of the beneficial ways profit is employed. A few years back, J&J purchased Crucell, a Dutch biopharmaceutical company, for their work in vaccine development against infectious diseases. Much of the work J&J invested in failed to pan out, and J&J wrote off a significant portion of it.
Failure is the norm, not the exception. More than 8 out of 10 vaccine drugs fail in clinical trials to provide adequate protection. Moreover, the time to development takes 10 – 15-years. Pharmaceutical companies, not unlike companies from other sectors, need to take many shots on goal (even with advanced technologies) to score a (big) win for their organization and our healthcare.
What funds these shots on goal and the development of breakthroughs? Profits! The profits are used, in this example, for ongoing research and development.
Where’s this story going? Despite the setbacks, the acquisition of Crucell led to two technologies underpinning J&J’s success in helping protect us, and the world, from Covid.
Profit is not evil. Perhaps, a mode of pursuit and achievement may ultimately prove to be bad. When we cut investments, slash employment, ignore replacing aging capital equipment, take price hikes above increases in the cost of goods, among others, all to achieve arbitrary profit targets, we hurt the organization’s prospects for long-term survival, employee livelihood, and the well-being of communities in which we live.
Profit is not evil. It is not something to condemn. Grow profit by doing the right things in the right way and invest it wisely to grow your business, employees, and communities.
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Peace and best wishes,