thumb tacks, thumb tech

Musings and rantings about...EVERYTHING.

Tuesday, August 14, 2007

Profit is not a metric

Maximize profit - thus, profit is the metric for managing your business success. The best way to choose among competing projects is to determine which one generates the most profit. All wrong. Profit is the byproduct of actions taken in the past. Profit is merely a result. Many contributors to success are not measured in dollars and cents. This was the case at Krispy Kreme Donuts when sales declined in 2003-2004 by measurable levels of customer dissatisfaction.

Customer-driven metrics or traditional cost-accounting controls - you choose.

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