Is the bottom line all that matters?
“It was a bottom-line decision!”We hear this more and more to justify decisions the perpetrators would otherwise find embarrassing. Regardless of how unsavory the issue, if it purports to be more profitable, then it must be OK.And so jobs by the thousands are exported overseas. Good workers, loyal perhaps for decades, are laid off, and their jobs are given to people we don’t even know (and who don’t buy from us) in other countries. “We’re a global company now! It’s a bottom-line decision.” And that makes everything all right.Mortgage companies have given thousands of mortgages to people who obviously couldn’t afford them. The resulting foreclosures and even bankruptcies have caused incredible misery and economic loss, but the folks who sold those mortgages got their commissions. They justify their actions like everyone else, “It was a bottom-line decision.”Many banks and investment houses wanted nothing to do with these subprime mortgages when originally forced to accept them by the government. When the real estate market was rising, these instruments became quite lucrative. Some institutions pulled out all the stops and loaded up on them. “It was a bottom-line decision.” They forgot about diversification. When the real estate bubble burst, they were left holding the bag, and some of them are no more.I don’t think I’ve ever heard that phrase, “It’s a bottom-line decision,” used to justify a good decision.When Steve Jobs came out with the iPhone, I don’t remember hearing him say that. When Toyota gave us the Prius, I don’t remember seeing that phrase in the press release or any of the ads. When Sergey Brin and Larry Page founded Google, I don’t remember any discussion of a bottom line, yet all these bottom lines have exceeded everyone’s wildest expectations.Time to take stockIt’s interesting, even fascinating, that many of the decisions made expressly for the bottom line have not been very profitable. Yet, those that are made for or even to anticipate people’s needs and wants become intensely profitable.Many of the companies that have moved their operations offshore are struggling now more than ever. It didn’t save them. In fact, many have discovered to their detriment that they would have been better off staying where they were, but now it’s too late. The facilities have been mothballed; equipment has been auctioned off and the trained workforces are long gone. Although such obstacles are not insurmountable, they’re tough to overcome in this economy.Ben Bernanke and others have proclaimed the recession is over, and that it will be largely a jobless recovery. That only shows how out of touch they really are. The biggest problem most companies face is not enough customers. That’s what’s causing the layoffs, lack of earnings, etc. Unemployed people don’t buy things. People afraid of losing their jobs don’t buy things either.When there are six times more job-seekers than there are jobs available, a large chunk of the market is incapacitated. How will we recover without it? Producing offshore sometimes yields lower costs, but it simultaneously destroys our markets.What kind of decisions do you find yourself making nowadays? If you’re justifying them with that phrase, be careful. That “bottom line” is often like bait on a hook. Once you bite, it’s really tough to get off.As we approach the holidays, we may want to take stock of where we are. In only a few weeks, our accountants will close the books on 2009 and figure out how much we’ve made. That’s good information, but it’s not all that matters.How well are things going? How well are they going in comparison to last year? To five years ago? Do we have an old calendar or other reports from that time that we can review? You see, there’s a good chance we’re still struggling with the same problems, and they may have gotten even worse. How many new ones have we created?If things are worse, we don’t want to keep doing what we’ve been doing. How many bottom-line decisions did we make during this period? In retrospect, do we still feel good about any of them? If not, what are we going to change?And, yes, happy holidays to all of you. May 2010 be your best yet.Ronald J. Bourque is a consultant and speaker from Windham. He has had engagements throughout the United States, Europe and Asia. He can be reached at 603-898-1871; email@example.com; bourqueai.com. Edit ModuleShow Tags