Is Making Money Your Goal? Should it be?

When I was a kid, back in the Mesozoic Era, I worked a paper route for the home town newspaper.  Back then towns actually had home town newspapers.  Back then nobody was concerned about a nine year old wandering around alone in all kinds of weather, daylight and darkness.

I was an unlikely prospect.  Smallest kid in my grade, the delivery bag looked downright comical.  I was also a lousy salesman.  All my direct sales calls resulted in dead air or polite “no, thank you”.  When I focused on making more money, I failed.  Yet I managed to build the route from 25 to 125 customers.  It surely wasn’t salesmanship.  It was service.  It was striving for operational efficiency.

Now you might ask what a nine year old knows about about service or operational efficiency.  Well, nothing.  What a nine year old does know is grownups get grumpy when their paper is late or wet.  And, nine year olds are lazy (at least this one was).  One result was that I made damn sure I got dry papers, on time, to my customers no matter what.  The big result, though, came from being lazy….err, operational efficiency.

As I delivered from house to house I would cut across front yards if the customers were next door, but would walk up and down driveways if I had a non-subscriber in between.  To fix that I needed an unbroken link of subscribers on each side of the street.  So, any time a subscriber went on vacation and asked me to cancel the paper, I didn’t.  I paid for it myself and delivered it day after day to that “non subscriber in the middle” with “free sample” scribbled on the front page.  Without fail, after a whole week of free delivery, I had a new subscriber.  In many cases one that had said no to direct sales calls.

When I focused on making money, the value to the   prospect was not obvious.  When I focused on service and efficiency, it was obvious.  And I made more money.

What Really Matters

Is this relevant today?  Well, I’m not sure there are any newsboys left but, as luck would have it, the underlying theme is pretty universal.  Everyone is busy.  Everyone is being pitched to death.  No-one wants to hear yours.  What they’d like to hear is how to solve a problem, or have things run a little more smoothly.  What they’d really like is someone to listen to what they’re wrestling with before you spout off how great you would be at helping them.  A friend of mine in the financial services industry calls it “Closer’s Breath”, that air of “can we close a deal today?” urgency that seeps out as you whip through the card deck.  And it’s not just a sales issue, it applies to operations as well.

Build It Well And They Will Come

It’s easy to see how one would think the best way to manage a business is to manage from the bottom line.  But there isn’t an honest worker or manager who doesn’t have a tale of cost cutting gone wrong, or of financial engineering creating short term gain with long term pain.  The urge is strongest with large organizations and with deals operating under intense time pressures.  It’s what I call the Fallacy of The Quantitative.  The belief that removing the subjective components of the business results in better decisions, more efficient operations, and better financial performance.  The problem is that your key market differentiator is subjective.  It’s the trust you build with your customers.  And your operational effectiveness is driven by subjective factors.  It’s the trust you build with your employees.  It’s the intangibles of motivation, intrinsic values delivered consistently that yield sustainable growth.  It’s easier to just look at the numbers.  And there are more people trained to do that than there are experts at driving qualitative initiatives.  But that’s why there are fewer top performing firms.  That’s why so many deals don’t work out as envisioned.

The Money Will Follow

Yes, everyone understands that if you don’t make money, you go out of business.  The point is that the money is the metric, a by-product, not the raison d’etre.  You exist to serve, provide, add value.  For that, done well, you make money.

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