I have a personal belief that not everyone is wired to make money. I’m not sure if people are born with it, but I call it the money-making gene. Regardless of whether it’s inherited or learned, it’s an important skill set for the people on your team to possess. You might not realize how destructive that can be to your business if they don’t.
The economist Milton Friedman famously said that the purpose of every business is to maximize shareholder value. In other words, to make money. That maxim has since been expanded to include maximizing the return for all stakeholders in a business. Still, the importance of making money hasn’t changed, since profitability is critical to survival.
The importance of money
How you view money is part of how you view the universe. It’s neither a good thing nor a bad thing. Some of our brains work this way–and some don’t. Some people are far more artistic or creative; money is just the last thing they think about. Some even think money is the source of evil and should effectively be eliminated.
The trouble comes when someone who doesn’t think about money is asked to play an important role in a business whose primary goal is to make money.
While we don’t always associate what happens in our personal lives with how we might perform at work, there are a lot of synergies when it comes to attitudes and aptitudes related to money. If someone doesn’t make good financial decisions in their personal life, why should you expect that to be any different on the job?
I once had a person working for me in an international sales role. It was always a problem when this person needed to travel because their personal finances were a wreck. They didn’t qualify for a credit card and didn’t have enough cash in the bank to cover the advanced costs of airfare or hotels. That meant that we had to issue this person a cash advance before they traveled to cover their travel costs ahead of time and collect the remaining cash when they returned. This was the only person I have ever done this with over the course of my career, and it will be the last.
While you might argue that their personal finances had nothing to do with the job, you’d be wrong. This person made a series of bad deals for the company, all resulting from their lack of financial acumen. Put another way, I had someone in a sales role who lacked the money-making gene. Lesson learned.
It starts at the top
Don’t overlook that even people who start businesses might lack the money-making gene. I was involved in just such a case. The company’s founder was a brilliant and creative person who had found a way to start a business and deliver a great customer experience. But that came with a catch: This person had no clue about how to make money with the business they started.
Despite that, the founder raised millions of dollars from investors based on the business’s potential. But, after most of that money had been unwisely spent, the company was forced to bring in a new CEO to help the company turn things around. Sadly, it was another case of someone who lacked the money-making gene.
What does your team look like
Just remember that it’s easy to fall into the trap of thinking everyone thinks the way you do. If you understand how to make money as a leader, don’t assume everyone else on your team does as well.
And to be clear, there are places for creative thinkers who might not possess this skill. The key is to ensure their roles work to their strengths–and not their weaknesses.
So, when it comes to your team, who has the money-making gene, and who doesn’t? Anyone involved in making financial decisions–in sales, marketing, finance, etc.–should have the money-making gene, or you might be in big trouble.