Quote:
Originally Posted by sexobon
For every example of successful high risk takers cited, who went into business for reasons other than profit, there are hundreds who failed for the same reason.
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Biggest reason for business failure is concentration on (attention to) profits. That myopia routinely creates failures - once one learns from history and not their emotions.
If making an innovative (desired) product, it should be making a profit. If it does not concentrate on the only thing that matters - products - then massive losses are realized years later. The word loser applies to those who dumbly believe profits are the purpose.
Profit does not exist for maybe four or ten years. In a productive environment, profits cannot be quantified. Any effort to do so often harms the product. Only the product can be quantified today. If they get it right, then profits are massive - but only years or decades later.
GM worried about profits 20 years ago. GM must now pay $millions to maybe 1000 Cobalt owners - because they worried about profits - not the product. GM maimed and murdered people - to protect profits. Extremist (low intelligent) management thought only profits mattered.
Opel, that once earned GM $1billion annually, was cost controlled to increase profits. Resulting in crap for decades - because profits were important. GM must sell Opel to create profits. GM cannot fix Opel by addressing an inferior product line. Only those so extremist as to want profits will sell capital assets to claim them as profits. GM refused to let Opel develop new products - to cost control - to increase profits.
How did William Clay Ford fix Ford? Moderates learn from reality. He ignored profits. He addressed reasons for Ford's self destruction. Everything Ford made in 2000 was crap. In 2007, Ford had never lost more money in the company's history. Because William Clay ignored profits seven years ago. Therefore he was intelligent - not brainwashed by emotions and rhetoric. He did not take government money even though losses in almost 100 years (by number and percentage) had never been larger. He ignored profits - only addressed products.
Ford ignored profits - resulting in highest profits in Ford's history a decade later. It takes long for products to create profits. Intelligent moderates create everything good by ignoring profits - only address the product.
A peer was driven from top Apple management - because Apple only wanted profits. He walked out in overt anger because Apple refused to let new products be developed. Apple would not design any product that was not justified by profits. Therefore Apple products were crap - made diminishing and no profits.
What changed? Business school graduates - driven by profits - were replaced by people who ignored profits - who focused only on products.
Amelio was not wacko dumb. He ignored profits; only addressed the product. What resulted is almost routine. It saved Apple. Attention only on products created historical profits. They had profits because they wanted better products - not profits.
Companies that worry about profits routinely self destruct many years and decades later. Almost every time despite emotional and extremist rhetoric. Companies that survive for decades concentrate fully and only on their products. History has not changed despite what soundbyte rhetoric proves.