Here’s a random thought on business management, informed by decades as both an employee and a business owner:
A large portion of American business practices (and non-American business practices, as well) are driven by an erroneous concept of “the bottom line.”
When cutting corners, pay or benefits, people often claim to be “watching the bottom line.” Is this really good for business, though? Not if you want that business to last.
A week or two ago, I got into a debate with an online acquaintance. Our disagreement? Does a business exist to sell a product or service to its customers, or to provide maximum profit to its owners and shareholders?Ideally, I’d imagine, it provides both product and profit, striking a balance between the two so that the best interests of customer, owner and (one would hope) employee are valued.
Yeah… good luck with that.
Since, at the very least, the Reagan administration, there’s been a sickening trend among stockholders, executives, and “superstar CEOs” to turn corporations into slash-and-burn machines. For the sake of short-term “profits” (which, as the current economy displays, are long-term losses), quality is cut, employees are disregarded, customers are shafted, and a handful of people get nice big checks. Middle managers are squeezed to provide ever-increasing profits, and then punished if the following quarter looks “less profitable” (read: makes as much money or less) than the previous ones. Bonuses are then handed out at the end of the year – usually after a mass of employees have been laid off just before the holidays in order to boost that last-minute profit margin. Great for the lucky few, I guess… but terrible for everyone else, including that company’s customers.
A company’s true bottom line is not quarterly income statements – it’s long-term stability and prosperity. When a company treats employees poorly (thus losing loyalty and productivity), shorts its customers (by reducing quality of service and goods by firing and/ or alienating experienced employees), and destroys its internal morale (through stress and mistrust) that company’s bottom line suffers.
The company that makes a ton of money in a year and then falls apart in five does not have a strong bottom line… unless, of course, you’re a corporate raider or a short-term stockholder. For such people, this is, as they say, business as usual.
THESE PEOPLE ARE NOT MANAGERS – THEY’RE PROFITEERS.
They’re pirates, not captains.
My father commanded two ships and was second-in-command of a third. His career in the U.S. Navy was marked by proud, honored and distinguished service. Thus, I know a little something about what good captains do.
A good captain keeps his (or her) ship in good order. He knows how it works, runs its crew with firm but fair discipline, watches out for hazards, and guides that ship through storms for as long as he possibly can.
A captain who runs his ship aground, calls in his friends, loots the goods and sells them for a profit is not someone you want running your ship. He’s a pirate – and not the fun kind.
The era of the Superstar CEO ushered in a generation of pirates. Unlike men or women who built their companies to last, these folks run their ships carelessly, abuse the crew, loot the cargo and wreck the ship.
Really, folks – which type of captain is REALLY watching out for “the bottom line”… and which one is sending ships to the bottom?
And which type do you want in charge of your future?