Purpose vs. Profit: What Happens When Flat Companies Lose The Balance
Last week I was sitting in the Old Imperial Bar of the Imperial Hotel in Tokyo, a room still dressed in the warm, geometric style of Frank Lloyd Wright’s architecture.
A cold glass of Asahi beer rested on the table beside me as I leafed through Charles Handy’s latest book titled The View from Ninety: Reflections on How to Live a Long, Contented Life.
In the book, the late Handy recalls an African saying he first wrote about years ago:
People have two hungers: the hunger for food, and the hunger for meaning.
Satisfy only one, and you’re only halfway alive.
I looked up from the page and took in the amber light, the patterned brickwork, the subtle symmetry of Wright’s design. The man himself once said:
All fine architectural values are human values, else not valuable.
Wright could have been talking about business as much as buildings: if your work doesn’t serve human values, it has no real worth. No matter how impressive it looks on paper.
And that’s when I thought of the man who founded this place (the Imperial Hotel), Shibusawa Eiichi.
The father of Japanese capitalism
Shibusawa (1840–1931) is often called the “father of Japanese capitalism.” Over his lifetime, he helped establish more than 500 companies: banks, factories, schools, hospitals.
(How one man could seed so many ventures still baffles me today. Extraordinary discipline? Brilliant delegation? Or just a refusal to accept that one life should have only one career?)
His secret may have been philosophical rather than operational. Shibusawa argued, in speeches and essays, that:
Profitability and morality must walk and in hand.
Because profit without morality leads to exploitation.
And morality without profit is idealism that cannot last.
From philosophy to practice
In traditional businesses, morality often flows from the top. A CEO’s values (good or bad) set the tone.
The hierarchy defines what’s acceptable, and middle managers act as moral gatekeepers, balancing profit targets with the ethical direction set above.
In flat organizations, there are no middle managers, and no morality handed down through a chain of command.
Which raises the real question:
How do you keep a flat organization balanced between profit and morality when that morality isn’t anchored in hierarchy?
Three sources of morality in self-management
In our work, we see three main flavours of self-management. And each has its own built-in source of morality:
- Markets guided by proportionality
Think of flat companies divided into internal micro-enterprises trading with each other guided by proportionality. Here rewards must match contributions. If peope give more, they should get more; if they consume more resources, they should pay more. - Collectives guided by equality
Think of flat companies divided into group of equals, built on equality and reciprocity. Here people give and take over time, making sure no one is freeloading and no one is exploited. - Communities guided by unity
Think of flat companies organised as purpose-driven tribes, bound by unity and belonging. Here people feel they are in it together; they help each other unconditionally because they share an identity and a mission.
When these moral forces are healthy and balanced, they keep the organization in check.
When they weaken, get dogmatic, or get crowded out by short-term financial logic, things can tip.
And when they tip, they tip fast.
When the balance tips
- Markets without proportionality
Think of a group of start-ups doing business together, but strip out fair competition and fair trade. If teams start cutting corners to maximise profit, charging unfair prices internally, or withholding help unless paid a premium, you get a ruthless winner-takes-all race. Smaller or slower units collapse. Collaboration evaporates. People start gaming the system rather than building value - Collectives without equality
Reciprocity isn’t just “being nice”; it’s about a rhythm of give and take. Remove that, and a collective can devolve into what Lisa Gill calls a prison of politeness. In these 'bro cultures' no one challenges poor performance because it’s “not nice.” As a result, a few carry the load while others coast. Decisions drag because nobody wants to push. And in the absence of a shared ledger of contributions, resentment festers quietly until trust cracks. - Communities without unity
Communities run on emotional glue; shared purpose, mutual care, and identity. But if communities turn inwards and dogmatic, its leaders start getting elevated into untouchable figures. The culture shifts from “we” to “them and us.” This is how purpose-driven groups slip into cult-like dynamics, where dissent is betrayal and loyalty is valued over truth.
The common thread?
When the moral source drowns out of the flat organisation (whether proportionality, equality, or unity) self-management doesn’t just fail.
It fails ugly.
Designing for balance
The answer isn’t to abandon profit. It’s to protect the moral source of each system as fiercely as you chase revenue:
- In markets: bake proportionality into pricing, resourcing, and rewards. Measure fairness, not just output.
- In collectives: make equality and reciprocity visible through transparent contribution tracking, peer feedback, and regular recalibration.
- In communities: invest in rituals, stories, and symbols that renew the sense of unity and belonging, especially when money’s on the line.
Two voices, one truth
Sitting there in the Old Imperial Bar, I realised Handy and Shibusawa were making the same point in their own ways:
Meaning and money aren’t competing goals.
They’re twin pillars.
Remove one, and the structure collapses.
Handy’s African proverb and Shibusawa’s creed that “profitability and morality must walk hand in hand” suddenly felt like two voices harmonising across time and continents.
One from a 19th-century Japanese boardroom.
The other from a 21st-century Irish philosopher.
Both pointing to the same truth:
The hunger for meaning is just as real as the hunger for bread. And the healthiest organizations feed both.
Want to design organizations that feed both hungers?
That’s exactly what we explore in our Corporate Rebels Masterclass: a 6-week deep dive into progressive organizational design.
We look at real-life pioneers who’ve found ways to balance profit with purpose, autonomy with accountability, and growth with humanity.
Our next cohort kicks off next month. September 23, to be precise.
If you’re ready to ditch outdated playbooks and build organizations that work for people as well as the bottom line, this is for you.
