There is an ancient proverb that states, "When you chase two
rabbits, both will escape." If you were to observe a bird of prey in
action, the validity of this would be obvious. Envision a mighty
eagle sitting on its mountain perch. To be successful the eagle must
focus on one and only one rabbit. To do otherwise would result in
starvation and death. Having clearly identified the target rabbit,
the majestic eagle makes its attack and savors the results of its
As practitioners in today's global marketplace, each of us
must be committed to our company's success. What is true for the
eagle must be true for us. We must focus on the "one rabbit" that
will ensure our corporate and personal success.
THE TARGET OF OUR
seminars, visit booths at trade shows, read industry publications
or newspapers, or listen to public, political, and scholarly
rhetoric and you hear numerous philosophies of what the main
purpose of a company should be. Observe the actions of many
corporate leaders and you may receive a similar mixed message.
While there may be
an element of truth in all these pronouncements and actions, the
leader who is not careful may have his or her focus blurred. The
simple hypothesis of this paper is that there is one fundamental
target. There is one and only one rabbit to hunt. For a company
entering the next millennium with the vision of surviving the
unknown, the only valid target is profit.
pursuit of profit needs to be built upon a number of fundamental and
guiding principles. When this occurs, the company is able to prosper
in the good times. It is also able to withstand the economic storms
that are inevitable in today's global marketplace. The earning of a
profit becomes a sustainable and honorable calling.
This importance of
profits can be very simply illustrated. Manufacturing is a process
whereby a company purchases what are categorized as raw materials.
Each of a series of steps adds value to this raw material, and
ultimately a finished product is created. It is through the proper
mix of human and machine resources that this transformation occurs.
There is an associated overhead that supports the process. There is
also an underlying need for capital to place these various resources
process does not stop here. This manufactured product must be put to
use. It must have a value to someone we call the customer. If no one
buys the output, the process comes to a screeching halt. The
availability of money ceases. This eliminates the development of new
products, the purchasing of additional materials, the paying of
wages and benefits, and the acquiring of needed overhead services.
effect occurs throughout the community, the national economy, and
the world economy. Suppliers are negatively impacted. Employees
lose their jobs and their earning power. Disposable income is
reduced. Ancillary businesses that provide goods and services lose
sales. The failure of one company to sell its product at a profit
has a far-reaching impact.
PRINCIPLES TO GUIDE
response that one might have is, "You have got to be kidding. You
are making the dollar the almighty king. This will result in rampant
abuses of power. Employees will be exploited. Consumers will be
fleeced. Pollution will be rampant. Only the fat cats will prosper.
This is the age of enlightenment and social consciousness."
The eagle is
constrained by the laws of nature. It is gifted with certain skills
and attributes. The eagle has certain physical requirements for
There are natural
enemies to avoid. There are certain places and times to locate food.
As long as the eagle operates within these constraints, it is able
to enjoy its freedom to soar as a majestic bird.
It is no different
for our top corporate leaders. There are fundamental principles
that must guide their focused pursuit of profits. Eight of these
guidepost principles that our leaders and we, as their followers,
must operate within are these:
1. The customer is
king. We must provide all customers with what they want, when they
want it, or when it has been promised to them, with the quality that
they demand, at the price that they can justify, and with the
ongoing support and service that they require. In fact, wise leaders
view profit and customer service as two sides of one coin. You
cannot achieve one without the other. Therefore, principles two
through eight must be focused upon decisions and actions that meet
our customers' needs and generate a profit.
2. Our employees
are our number-one asset. As such, we must have regard for their
needs that include a just wage, adequate benefits, appropriate
working conditions and hours, growth opportunities, personal
recognition, and security.
profits is best accomplished when we focus on those products and
within those markets that match our current or emerging expertise
4. Our vendors are
invaluable partners and must be treated as assets and not
adversaries. Their ability to earn a profit is important to our
earning a profit. They are more than a turnip from which to squeeze
the last ounce of blood.
5. Our business
strategy in the immediate as well as the long term must be combined
with character in order to earn a profit. If we must be without
either the strategies or character, we will always choose to retain
6. Government laws
and regulations will constrain our actions. We will strive to adhere
to the spirit of these laws and regulations. We will view them and
the authorities that enforce them as our friends. This will ensure
that we get to enjoy the lasting rewards of having made an honest
7. Our good name
will ultimately be worth more than our profits. Our decisions and
actions will be directed toward the enhancement or maintenance of
our good name with our customers, employees, vendors, regulatory
officials, and the general public.
8. Our ability to
profitably weather the economic storms will be directly related to
our willingness to operate within our income during the good times.
Monies will be set aside for the difficult times, and leveraged
operations and large debt will be avoided.
To Be Continued