Jul 282010
 
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Similar to the point on resourcefulness, it is important that you teach yourself and everyone in your organization, that it is all about profitability.  If you don’t have everyone in your organization on the same page with this, you’ll have a lot of waste, and you’ll have a lot of “penny-wise, pound-foolish” behavior.  It’s not simply about looking for cheaper ways to get things done, it’s about (for every decision) in the midst of time pressure and urgency to make things happen, making the effort to do a quick cost-benefit analysis before a decision is made.  Don’t spend money, especially in large increments, without a good reason.  But if the economic rational is there for immediate or future profitability improvement, by all means, spend the money.  Just remember, in the end analysis, everyone has to realize it’s all about profitability and creating wealth..

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  • Paul,

    This is a great point! If employees don’t care about profitability, they make decisions based on other factors that may hurt your bottom line. I have found that out the hard way in some of my businesses. Thanks for the tip!

    Laurie