Legendary coach Vince Lombardi admonishes us, “Winning isn’t the most important thing. It’s the only thing.” Now George Cloutier, CEO of American Management Services, has taken a page from Lombardi’s playbook with his own book titled, “Profits Aren’t Everything, They’re the Only Thing.” As hard-headed business people, it’s pretty difficult for us to argue with his point of view, isn’t it? Isn’t it? Well, maybe not . . . at least from my point of view, there is some room to disagree. For more on profits and profitability, please read below.
“Profits Aren’t Everything. They’re the Only Thing.”
Cloutier’s company specializes in turning around troubled or failing companies, so you can see why he’d feel that way. His clients have to get profitable real quick or they simply go away. And after all, as business people, even if our businesses are healthy, we’re all about making profits, aren’t we? So why do I find the title of Cloutier’s book disturbing? Furthermore, it disturbs me that I’m disturbed. Does that make sense? I mean, I think I’m as capitalistic as the next guy. For cryin’ out loud, the tagline on my business card even says, “Helping small business owners to grow profitably.” So why does Cloutier’s premise bum me out?
I guess what troubles me about Cloutier’s title is the word “only.” Of course, if you simply drop out that word, the title doesn’t make much sense, but still the word bothers me. Not that profits aren’t important, clearly they are. Without them, we can’t stay in business. Still, when you say profits are “the only thing,” you give our profession a certain Scrooge-like image . . . like we’d probably sell our mothers and our first born for a few more bucks on the bottom line. It says we could be in any kind of shady business using unscrupulous and unethical practices, but as long as we’re turning a profit, it’s OK. I know lots of business people (and you do too) who fervently believe that their product or service provides a positive benefit to society. Sure, they recognize that they have to be profitable if they want to continue to deliver that benefit, but the profit motive isn’t what propels them out of bed every morning.
The other aspect I don’t like about profits being “the only thing” is that it necessarily points us toward short-term thinking. This is most evident in the wonderful world of publicly held companies where if we miss our earnings target by just a few pennies, our stock gets hammered by the Wall Street analysts. So if I’m the CEO of one of those companies and I want to avoid the Wall Street hammer, what do I do? Well, I put off needed upgrades to our plant and equipment, or I scale back spending on R&D, or I freeze all training expenses . . . all of which will make my company less competitive in the long term, but hey! We’ll make our numbers this quarter and that’s all that counts. Pretty dumb, huh? But if we focus on profits to the exclusion of everything else, that’s what can happen.
Again, profits are vital to the health of our business and our profitability needs to be a key focus, but not the “only” focus. To focus solely on profits can lead to inappropriate business practices and endanger our long-term future. In my view, that’s not a path any of us should want to walk.
Rock Solid Business Development
Phone: (847) 665-9134
andy@rocksolidbizdevelopment.com
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