I was just reading a New Your Time article titled “When Academia Puts Profit Ahead of Wonder” (Click on the title to read the article).  It speaks eloquently about the problem of unintended consequences, the difficulty of being able to accurately predict all the results of our actions.  Hence many of our very well intended decisions often produce surprises we did not intend when the decisions were made.

In this article the author describes how the Bayh-Dole act of 1980 started with the best of intentions but how over time the very thing it sort to do seems to have created the opposite effect.  And so that you can understand its original intent let me quote from the article: “By clearing away the thicket of conflicting rules and regulations at various federal agencies, it set out to encourage universities to patent and license results of federally financed research. For the first time, academicians were able to profit personally from the market transfer of their work. For the first time, academia could be powered as much by a profit motive as by the psychic reward of new discovery.”

The idea was that by opening the profit motif to academia we would stimulate more research and hence increase US competitiveness.  What have been the results of this premise? “…data gathered by the Association of University Technology Managers, a trade group, show that fewer than half of the 300 research universities actively seeking patents have managed to break even from technology transfer efforts. Instead, two-thirds of the revenue tracked by the association has gone to only 13 institutions.”

And what has been some of the unintended consequences?

R. Stanley Williams, a nanotechnologist from Hewlett-Packard, testified to Congress in 2002 that much of the academic research to which H.P. has had difficulty gaining access could be licensed to several companies without eroding its intellectual property value.

‘Large U.S.-based corporations have become so disheartened and disgusted with the situation, they are now working with foreign universities, especially the elite institutions in France, Russia and China, he said.”

“Perhaps the most troublesome aspect of campus commercialization is that research decisions are now being based on possible profits, not on the inherent value of knowledge. “Blue sky” research — the kind of basic experimentation that leads to a greater understanding of how the world works — has largely been set aside in favor of projects considered to have more immediate market potential.”

While there are those who would argue that profit is bad and the root of all evil I contend that profit is not only good but it is one of the most critical components of our society.  This is true not only for the for-profit business but for all organizations that seek to serve our society.

What I do believe is that profit has lost its way in our current worldview.  Profit is, in its rightful place meant to be an indicator of the achievement of our purpose.  Put simply when we serve a community of customers and provide them value in the goods/services they return to us revenue.  To produce and deliver those goods/services we incur expenses.  Profit is simply then an indicator – an indicator of the relationship between the value provided to a community and the cost of providing it.

The problem is not the desire to make a profit, for that is nothing more than the desire to give more than you receive.   The problem lies in the “profit motive.”

When the motive is not about making a valuable contribution but about making a profit, then we have moved profit away from being an indicator to being the goal and this is what creates the many unintended consequences we are experiencing in our society today.

Throughout his professional career as a Chief Executive Officer, Corporate Director, and Advisor to CEOs, Norman Wolfe has successfully guided corporations through major transitions leading to substantial growth, market expansion and enhanced financial performance.