Thursday, September 1, 2011

If we hadn't lost money we would have made a profit!

A while back I wrote a piece for Australian Anthill entitled “What an MBA should teach you”.

Since I wrote the piece I’ve had the benefit (?) of encountering more MBA’s, full to bursting with theory of management, finance, Mergers and Acquisitions and the new buzzword in these troubled economic time, Corporate Governance.

It still seems to me like the basics of the Mallard and Doillarmite Theories are still roundly ignored by these newly minted ‘Captains of Industry’ in favour of management triple speak in year end accounts that translate to “if we hadn’t lost money we would have made a profit”.

A degree and an MBA and the best they can do is “we would have made a profit if we didn’t lose money”?

If you were a shareholder of a company and found a comment like that in your annual report you’d be, rightly, looking to mount the heads of the Board of Directors on the wall of your trophy room.

Instead of trying to spin a bad result into a not so bad result by using mealy terms like “we would have made a profit if we didn’t lose money” they should man up and tell it like it is and then tell us how they plan on fixing it.

Business has become so intolerant of mistakes that an entire vocabulary has been created to make bad news seem like better news.

I recently heard that a comment that said one of the reasons Apple is so successful is that they make so many mistakes.

This is not a bad thing.

The Commander in Chief of the Pacific Fleet and Pacific Ocean Area during the Second World War was Admiral Chester W. Nimitz. Early in his career he commanded the USS Decatur and was court martialled for grounding his ship.

In the modern business world (or the modern US Navy) something like that would have been the end of his career.

In an age where the “Zero Defect Mentality” didn’t exist to the extent it does today he was able to come back from this incident and was the US signatory to the Japanese surrender aboard the USS MIssouri followed by two years as the Chief of Naval Operations.

In modern management speak Chester Nimitz started in the mail room became a middle manager, screwed the pooch on a deal, but was able to get over that and become CEO.

Usually a middle manager that screws the pooch on something basic will never make it to the CEO chair. Nimitz learned from his mistake and turned it into a brilliant career.

How many great leaders are we consigning to the trash bin?

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