Last week, I addressed an industry meeting during which a speaker talked of the value of being profit-driven and that every decision should be made on the basis of its financial merits.
Ten years ago, I'd have made nearly the same speech. My conviction at the time was that we needed to think in terms of agribusiness and not agriculture (business vs. culture).
Listening to the speaker, however, it struck me that I no longer agree with solely a profit motivation. I've come to understand that part of the allure of this business is its culture. The integrity, traditions and values that symbolize our business must be preserved.
I've softened because profit is only part of the reason I'm in this business. It's also the lifestyle I admire, and values I aspire to represent.
But I also have deep concerns about the argument for profit-based management decisions, which almost always seems to be used to excuse a non-response to customer demands. Certainly there are limits to what can be done on the customer-service side of things -- after all, overspending can reduce profit margins.
There are two types of profit. The first is short-term; it's what people refer to in arguing the importance of profit in management decisions. It can be summarized by the mantra, "I'll do it when I get paid for it."
The second type of profit is long-term. Here, the perception of the industry, demand for our product and the like become critical.
Perhaps I'm getting old, but preserving traditions and focusing on long-term profits over short-term ones shouldn't be just a consideration; it should be a primary focus.
Of course, I'd be the first to admit that without short-term profits, long-term profits aren't an option, and that a key to sustaining our lifestyle is to have a sustainable and profitable business model.
-- Troy Marshall