Down the Road: The Idea
March 18, 2010, 5:00 am
Copyright © 2010 Integrated Profitability TM
The whole idea behind the Integrated Profitability blogs is maximizing profitability.
But I almost never say it that way. Rather, Integrated Profitability is about maximizing long-term, sustainable profitability. Those two descriptive terms are important for many reasons, not the least being a company’s ability to, in fact, maximize profit.
The Contra Costa Times article by Ken Thomas entitled “Auto Industry; Documents: Toyota boasted of saving millions on recall” (Monday; February 22, 2010; p AA4) highlights several key points:
● Short-term gains can be long-term pains
● “net-profit” as a performance metric must be related to a company’s overall net-profit, not just a single sub-set
● business functions exist for a reason
● the corporate body needs both line and staff functions
● performance measurements must be pertinent
● performance metrics should cover the time period of the effects of the particular act being measured
The concept of strategic tracking of net-gain evaluates an action in terms of its All-in effects.
From a process perspective, the same concept says to contemplate, execute, and evaluate an action, task, decision, or project in terms of the All-in effects caused by such action, task, decision, or project. Otherwise, everything else that is affected is not taken into account. Without a full set of facts that include ripple effects, how can one possibly evaluate the wisdom of specific actions, tasks, decisions, or projects?
Nothing is ever done in a vacuum and the more one knows about the environment in which decisions are made and actions taken, the better the long-term benefits and the less the long-term pain.
Next week: An All-in view
Bill
William A. Stong
Email: william.a.stong@gmail.com
SBF&P # 58
Telephone: 925-202-6244
Copyright © 2010 Integrated Profitability TM
Subscribe to our blogs using either our 
