Why it's fine to be ignorant of your company's profit

An acquaintance who works for a well-known company e-mailed to tell me that in an idle moment he had been looking at its intranet and noticed something odd. His chief executive's post about the organisation's latest results had attracted eight "likes", while a post saying that a vending machine had been installed on the sixth floor had got 197.

I thought you'd enjoy that, he said.

I did enjoy it, but didn't find it odd in the slightest. I've long known that corporate employees were irredeemably trivial. A colleague who for years was the Financial Times' managing editor once told me that by far the most unpopular thing she ever did - more so than making people redundant - was axing free coffee and superior biscuits that were delivered to every team on Thursday mornings.

It is not just in this man's workplace that people care more about chocolate bars than profitability. Try this test: Ask anyone in your office how much money your company made last year. I have been asking the question of everyone I've come across. Most looked panicked, as if they had just been found out - some made wild guesses, while others hung their heads and admitted total ignorance. I asked a friend who for the past 20 years has occupied increasingly senior positions at the same company. Her reply came back: "Haven't a clue." The only person I asked who could tell me exactly how much his employer made had a bonus that depended on it.

This, surely, is a version of Parkinson's law of triviality, which states that the time we spend thinking about something is in inverse proportion to its importance. In Parkinson's example, a committee spends three minutes approving the construction of a nuclear reactor, and then 45 minutes over a bike shed. His conclusion was that we dwell on the trivial because we understand it, while we shy away from the complicated because we are out of our depth.

Just as I was thinking this, my friend sent me another text: "...and I don't care either." I looked at the message and it occurred to me that I had got it all wrong. Her reluctance to engage with how much money her employer makes wasn't that she doesn't understand it or that she is trivial or stupid. She was being perfectly rational.

My friend doesn't need to know what her employer's P&L (profit and loss) looks like, so long as it is healthy enough not to affect her job. She works for a multinational and her contribution does not affect the overall profit one way or another. She does know the profit margins on the parts of the business she is responsible for, and manages them assiduously.

Equally, to care a lot about a new snack dispenser is not at all stupid, but is wise for three reasons. For a start, it has direct implications for what you can eat. Secondly, it is an indication that the company is not about to go bust as it is making discretionary investments, and thirdly, it suggests some degree of intelligent management in that the wishes of staff are taken into account by the facilities team.

You could say we have a duty as responsible corporate citizens to take an interest in the finances of the organisations we work for, but I'm not sure we do. Given that we stay in jobs only for as long as it suits us, and given that we could jump ship and join the competition at any time, there is no point in feeling proprietorial about what our company does in general.

That doesn't mean we shouldn't try hard and take pride in our own work. We ought to mind a lot about things that make us more or less likely to get promoted/sacked - and mind even more about how congenial are our immediate bosses and colleagues. By contrast, the bigger stuff does not seem to matter much at all.

There is another problem with the big things. The larger the company, the more abstract its results, and the more difficult to explain. Add to this the fact that CEOs default to boring in formal communication, and you guarantee that any attempt to tell employees about supposedly important things will leave them cold.

There is a lesson here for top management. Unless you can show that a post on global strategy is as relevant as a vending machine, there is no point in making it.


A version of this article appeared in the print edition of The Straits Times on September 06, 2016, with the headline 'Why it's fine to be ignorant of your company's profit'. Print Edition | Subscribe