The Profit Prophet

Most business school programs focus on the financial aspects of an business endeavor, and most specifically tend to focus on one simple parameter: Return-on-Investment, or ROI. Specifically, ROI is determined by calculating the profit (or gain) from any investment or expenditure, subtracting the cost of that investment or expenditure, and dividing the difference by the cost of that investment or expenditure. While this is a great metric for determining actual expenditures’ returns, it does not really bode well when dealing with intangibles such as services, or activities such as sales, marketing, accounting, etc. A long time ago (30 years ago) I started measuring to a different metric, Return-on-Effort, which took into account how much time, energy, additional assets (such as people), and change any new project will cost and weighed those "costs" against how much easier, faster, or more efficiently you could perform the process by expending that additional effort, to...

A Japanese company (Toyota) and an American company ( F ord Motors) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race. On the big day, the Japanese won by a mile. The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing. Feeling a deeper study was in order; American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing. Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team...

One of my colleagues, Patti Hill , former CEO of PR Firm Blabbermouth, and now PenmanPR, asked the question about the value of having "nano" inside. She points out that the consumer marketplace has become rich with nanotechnology-based or enhanced products from sunscreens to water repellent and stain-resistant clothing, gum, car wax, sporting equipment, heat-resistant windshields, consumer electronics, and nanoparticle-laden cosmetics. Do consumers really care? This goes to the heart of what I always talk about: technology v. benefits. Having "nano" means nothing unless there are concrete benefits of having nano technology. Also, nano has become so generic (like quality, value, etc.), that it really does not mean anything anymore. Now, if you are using nano-technology to improve something, or invent something new, it could be considered beneficial (ie. WiFi capable printers). The big mistake that technology companies always make is assuming peop...