I DON’T ORDINARILY blog about what Kris Rusch writes (even though I read it avidly) because bigger dogs with larger audiences always beat me to it. But occasionally, such as this week’s Business Rusch, she posts something that excites a peculiarly idiosyncratic comment from me.
I’ve been involved in business all my adult life. Unless you’ve worked exclusively in government, so have you. All that time, I’ve embraced an attitude best encapsulated (to my uncertain knowledge) in the enthusiasm for Tom Peters’ In Search of Excellence, in which he profiled a series of what he called (from his perspective as a McKinsey consultant) “excellent companies.” I firmly believe it is an iron law that the marketplace does not exist for the benefit of the seller, but for that of the buyer, and those who succeed in the market — in the end, ultimately, in the long run — will be those who best serve the customer.
The — or a — countervailing belief to that (among serious contenders — collectivists need not apply) is the short-term eye on the bottom line.
Business is all about money, money is the ultimate thing traded in any market, it is the most important factor in gauging a business’s health, and everything else comes second. In this belief system, the only disagreement there can be revolves around how long a time-scale you’re discussing — daily, weekly, quarterly, annually, or longer-term? As a front line executive, I have always tried to ensure that every single project in which I engage made not only a profit, but came as close to the established margin the business requires to thrive as I could manage.
But, is that always a wise course to follow?
Twenty-to-twenty-five years ago, the Patch Factory was at the end of a decade of phenomenal growth. At the beginning of the decade, as one of Bill Graham’s lieutenants put it, nobody’d heard of us, at the end of it, everybody knew our name and, at some point, did business with us.
The problem was that we were hemorrhaging red ink. Our sales grew month-over-month, year-over-year, but there never was a profit for the owners to take home.
A new owner bought in, a money man, who consolidated matters, cut staff, cut costs, changed the company’s behavior, and made us profitable again.
And a decade later, we were no longer growing. We were shrinking and losing market share to upstarts we should have been able to kill in their infancy, had our leadership not be so relentlessly focused on the bottom line, the 80/20 rule, and eliminating all the little “mice” on our balance sheets.
So, which approach is right?
Kris writes this week about consolidations in the publishing industry, and the importation of or usurpation of front-line business folk’s initiatives by “money men.” I wager they’re going to kill the publishing industry. At the end of the process, the landscape will look considerably different, and successful authors will be cottage industrialists — either self-published, or CEOs of micro-presses with a single author in their stables. And there will not be a single multi-national conglomerate to be seen.
I can only hope that the author and the reader will ultimately benefit from the change.