But profitability and cash flow are not what work is ultimately all about. Profit maximization doesn’t provide the type of inspirational aim that people throughout the company are willing to put their full energies towards, to commit a part of their spirit to. We are not saying that profit is bad. Yes, absolutely profit is needed, but profit in and of itself does not provide meaning.

Tom Chappell, founder of Tom’s of Maine, a highly profitable company, explained in Inc. magazine how the pursuit of numbers alone is an endless treadmill:

Quantitative goals can’t invest purpose in a process that has none. The quest simply for more of anything is inherently unsatisfying. If there is no point or joy in what you are doing, or if you lose sight of the point, then just measuring your progress can’t make it worthwhile or fun. If I can organize people around a purpose, that is the most powerful form of leadership.

Instead of making the office so luxe that employees would never leave, we spent our money on meaningful benefits for them and their families—better health care, IVF, the stuff that really changes people’s lives.

When we handed out perks, I wanted them to be purposeful in the same way. So we didn’t try to trap people in the office—we rewarded employees by paying for dinner out with their families, or a weekend away. And we were happy to throw serious cash at stuff that genuinely improved people’s experience, that brought them together and exposed them to new ideas and cultures and turned coworkers into friends.

In an unhealthy culture, each group believes that if their objectives trump the goals of the other groups, the company will be better off. In a healthy culture, all constituencies recognize
the importance of balancing competing desires - they want to be heard, but they don’t have
to win. Their interaction with one another - the push and pull that occurs naturally when talented people are given clear goals - yields the balance we seek. But that only happens if they understand that achieving balance is a central goal of the company.

This finding suggests that it may be the tangibility, rather than the magnitude, of the benefits that makes people care. You don’t have to promise riches and sex appeal and magnetic personalities. It may be enough to promise reasonable benefits that people can easily imagine themselves enjoying.

Last, when it comes to the key people who absolutely drive performance, great managers/coaches simply do whatever it takes to keep them on board, including offering a customized compensation package. If one person wants less base and more incentive-based pay, so be it. If another wants more time off, let it happen. “Fairness” does not mean “sameness.” You need to be creative and flexible in order to keep your top talent happy, from a compensation-package perspective.

Wages are one of your biggest expenses and should be used strategically to differentiate your firm from the competition.