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The 'Profits Now' Syndrome

One of the greatest  deterrents to sound, healthy corporate growth is "the profits now syndrome", according to author Robert E. Levinson in his book on radical decentralisation.

The computer-captivated numerologists, he says, are so obsessed by and preoccupied with this week's and this month's bottom line performance that they jeopardise the future well-being of the company. Their actions can make short term performance look better and even boost the price of the company's shares a little.
Levinson has nothing against computers per se— greatest management tool in the world and all that — providing EDP is used as a tool and not as a fact source in place of everyday good sense and judgment.
He is not the only one to bemoan the "profits now" syndrome. As every top-notch management consultant probably agrees, the key to sound growth is comprehensive long-range planning. It takes a great deal more than deciding to grow and then racing out to the market place to pull in as much business as possible to achieve a proper and viable growth objective.
For a growth programme to work, groundwork must be laid:

  1. Spell out in clear and unmistakable terms exactly what business it is in, and what business it wants to be in in five, ten and 15 years down the road.
  2. Management must also parade the company's growth opportunities in review and determine which ones it would like to pursue, and the degree of risk it is willing to take in pursuing them.
  3. Top managers, in particular, must determine how they plan to allocate their time and where it can be used to best advantage with long-term growth objectives in mind.
  4. A  firm  decision must  be reached, with alternatives thoughtfully considered, regarding the kind of growth being sought: growth throughdiversification, expansion of present product lines and markets, and other internal expedients; as opposed to external growth through merger and acquisition, joint ventures or the like.
  5. Top management must decide on a structure and hierarchy best suited to the realities of the marketplace and the growth  programme outlined. It must have sufficient flexibility built in to allow  for changes and adjustments to accommodate to the market and the economy.

And a warning. All it takes to thwart a company's growth plan is one key executive whose personal plan, short and narrow instead of long and broad, is in conflict.
Success in business, as in any joint endeavour, .depends on the level of expertise, experience and dedication of the managing group. Only if this group gives its all — in co-operation, harmony and rapport - can they achieve working together for a common goal.

 

'Half the reason people find it difficult to concentrate is that they regard each day as an extension of the preceding one. Judge your performance by what you have done today, not what you did yesterday or what you plan to do tomorrow'
Michael Korda

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