21 January Profit's Function (...white elephant.)

[Paul Terlemezian]

The purpose of profit is to ensure the future.

 

The purpose of our competition is to accelerate the obsolescence of our products.

 

How can the training function generate profit that allows its innovations to lead the innovations in learning needed by its company so that it can increase its future competitiveness?

[Paul Terlemezian]

This article "The 10 biggest management lies that Drucker exposed" might be helpful to your thinking.

[Paul Terlemezian]

Here is a cut and paste from "The 10 biggest management lies."

#10: The purpose of a business is to make a profit.

How can anyone possibly argue with the truth of this untruth? It sounds like a no-brainer. When I first heard Peter utter these words I thought it was some sort of altruism he was trying to promote. I accepted it not because it made any immediate sense, but simply because it came from Peter Drucker. Later I examined it much closer and saw where he was coming from and had to agree with his logic. Drucker reasoned that society entrusted wealth producing resources to a business enterprise in order to satisfy the wants and needs of the consumer. Therefore in any business the customer was the foundation. Without a customer there could be no business as the customer alone gave employment.

Profit, then, was a support function. It gave incentive to those who invested their time, money, and/or resources in the enterprise. Further, it enabled the two basic functions of innovation and marketing. Without these two, the enterprise would have no customers and would die. Therefore profit, like oxygen, was necessary for a business’ survival. But profit was the not business’ purpose.

When a genius speaks, you listen to what he says. Drucker spoke, and in the process changed much of how we look at management forever.

*****

So back to the first question I posed "How can the training function generate profit that allows its innovations to lead the innovations in learning needed by its company so that it can increase its future competiveness?

Perhaps more simply - how can we innovatively generate profit via learning that allows us to continue to innovate for the benefit of our company?

Could we:

1. Generate profit without the expense of employees or marketing

2. Build the innovation - prove that it works and then sell it to someone else to sustain (while enjoying a recurring built-in recurring benefit)

3. Use the profit from the sale and the recurring revenue to build the next innovation

4. Repeat

[Paul Terlemezian]

Here is another reference to what Drucker believed - What everyone knows is frequently wrong