You can be on Entrepreneur’s cover!

Is There Such a Thing as Good Greed? Although you'd assume greed is always a bad thing, it can be used so everyone wins.

By Adam Callinan

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

The term "greedy" has an overwhelmingly negative connotation -- and for good reason. When you have Bernie Madoff and Gordon Gekko ruining lives solely for their own benefit, greed has everything to do with it. They win and everyone else loses is typically how the story goes.

There are, however, circumstances when greed is good, and although you would think that most people with even a single ethical or moral bone in their bodies could tell a difference between good and bad greed, let's be sure that we're on the same page and dig deeper.

Related: Richard Branson on Doing Good by Doing Good Business

When greed is bad. Relationships are about give and take, not take and take -- clearly not a new concept. Bad greed takes place when two or more parties engage in an agreement or deal that results in only one of the parties winning and the remaining parties losing -- I mean really losing. What they are winning and losing could be a variety of items and doesn't always necessarily revolve around money, although it often does. These agreements build short-term relationships that will never last and will likely run the company into the ground over time.

Let's look at a few examples, and yes, I've actually heard of these happening:

If, as the owner or head of a company, you've ever uttered the words, "they make enough," when referring to one of your salespeople, you are being greedy. Or if you have ever re-routed the company's revenue with the purpose of avoiding paying your salespeople what they have earned, you are greedy and are probably also breaking the law.

Another great example is when the owners of a company offer equity ownership to someone that clearly earned it but limit the ability to sell the interest at its value. Instead, they are just using the equity as leverage to keep the person from leaving -- there is some serious bad greed going on here too.

Want a quick tip on how to spot these "bad greed" types? They will commonly make a point to tell you how generous they are and are always fair when it comes to relationships, when it's clearly the opposite -- they're only convincing themselves.

Related: Preaching the Morality of Capitalism

When greed is good. America has been built into the largest economy in the history of the world as a result of capitalism and, while there are ample opportunities for bad greed, there are just as many chances for good.

When two or more parties come together to work out an agreement with the intent to generate substantial value or revenue -- or often both -- and all parties involved win, good greed is at work. Capitalism thrives based on the idea that generating as much revenue as possible in an enterprise is a good thing, as long as it's not done at the direct expense or detriment of another. There is, of course, a major exception to this rule that occurs when it's done at the expense of a competitor in a battle.

Let's look at some "good greed" examples:

An employer puts together an incentivized compensation plan for their sales team that is fair and allows them to make as much money as possible as they are increasingly successful, without limitation. When the company makes money, the sales people make money -- good greed at its finest.

Another great example is the recent growth of social impact capitalism with companies such as Toms and OneHope Wine, whom give a substantial percentage of their profits, up to 50 percent with OneHope, to drive far reaching social impact. As these types of companies generate more sales, their philanthropic efforts increase in line and everyone wins -- good greed at its finest.

There is no question that as long as the world is turning there will be those that feel the need to be greedy -- the bad kind, of course -- while working diligently to take advantage of others. Yet it's important that we use greed in a positive and motivating way that will lead to long-term relationships and greater success for all parties involved.

Related: Reality Check: 3 Steps to Bring Egomaniacs Back to Earth

Adam Callinan

Entrepreneur and Venture Investor

Adam Callinan is a founder at BottleKeeper, the fast-paced and sarcasm-infused solution to the warm beer and broken bottle epidemics that have plagued the world for centuries. Callinan is also a founding partner at Beachwood Ventures, a Los Angeles-based early-stage and non-traditional venture-capital firm at the intersection of technology and entertainment. As an entrepreneur, Callinan has spent over a decade building small businesses in and around technology, medical devices and consumer products, which most recently includes an exit in 2013. Callinan lives in Manhattan Beach with his wife Katie.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business Solutions

Save an Extra 20% on the Ultimate Microsoft Bundle Featuring Windows 11 Pro, Office, and More

Pick up this package of popular Microsoft products for only a fraction of the price through April 16.

Business News

This Fan-Favorite Masters 2024 Item Is Still $1.50 as Tournament Menu Appears Unscathed by Inflation

The pimento cheese sandwich is a tradition almost as big as the tournament itself.

Business Solutions

Visualize Data for Better Business: MS Visio is $23.99 Through April 16

Set your team up for success with a reliable tool for creating organizational charts, diagrams, and more.

Business Solutions

Scan Easier and More Affordably with This 20% Discount

iScanner is a mobile app that makes document management, editing, and sharing easier.

Science & Technology

These Are the Top 6 AI Threats to Your Business Right Now

The modern workforce is forever changed by artificial intelligence. If you fail to understand that we will all need to learn AI to some degree, you haven't been paying attention.