Who is responsible for profitability at your company? Is it:

1. Sales
2. Manufacturing/Production
3. Purchasing and Inventory Management
4. Product Development
5. CEO 

Make your selection and then scroll down for the answer.

If you burn 500 calories more than you consume each day, you will lose a pound a week. I remembered this fact while out running recently. Curious, I visited a website upon return where I could plug in the time and distance to see how many calories I'd burned.

The website essentially screamed back, "That's Not Running!" 

I consoled myself with thoughts of the three giant uphills, oodles of orange spotted lizards flushed out by seven inches of rain, and my habitual gander into the woods where moose have crossed my path in the past.  

Humiliation aside, the reality is, it's NOT running! If I am "running" to take a break, get the blood flowing, get outside, or get 30 minutes of exercise, and I note my accomplishment accordingly, it doesn't matter that I am not exactly "running." 

However, if I am recording miles and telling myself or others I am a runner, I am just fooling myself. 

We fool ourselves far too often, at work and at home, by measuring activity, calling it by the wrong name, and confusing it with results.

The To Do list is notorious for promoting a false sense of accomplishment. It often includes many activities of little real value: urgent items of little importance, questionable items deposited there by people of little importance, routine tasks, consistency for the sake of consistency, etc. We check things off and call it progress. Sometimes we add completed items to increase that sense of progress. And we applaud ourselves when we finish everything. But did we accomplish anything that made a real difference?

Companies get caught in the same trap in even bigger ways. They often measure reports written, processes mapped, employees evaluated, inspections passed, projects completed, customers contacted, and on and on. There is no guarantee that any of these translate to revenue, profits, and customer satisfaction.

Take a good look at how you are measuring success. Are you making real progress on things that will make a real difference? If not, THAT'S NOT RUNNING!

Organization charts and goals can be extremely hazardous to profit margins. You may wonder how this can possibly be, especially after all the recent focus on cost cuts. 

The reason? Not all revenue dollars are created equal and not all cost cuts increase profits. With everyone responsible for something other than profits, profits suffer:

• The sales force is responsible for booking orders; big orders and lots of orders are what counts. They may not have any idea which customers and products are most profitable. 
• The production people are responsible for shipping quality products on time. The more products that go out the door on time, the bigger their bonuses and raises. It doesn't matter how many of those products have low or no margin. 
• The purchasing and inventory folk want the best deal on every purchase while keeping inventory low. Their raises depend on it. Important, high revenue projects and customers might influence their decisions, but beyond that, all lead times and savings are created equal. How much time do they devote to low margin products, making the margins even worse? Are their deals hurting the lead times of high margin products that need to be flying out the door?
• The product development crew ought to be focused on cost effective products, but are they? Are engineers from different groups working together to minimize development, installation, and maintenance costs? Or are they creating super cool products to wow the customer, beat the competition, and attract big bucks?

So now we come down to the CEO and the rest of the executive team. Surely they are responsible for profitability! 

The executives better know exactly what is and isn't profitable and why, so that low margin products and customers do not persist without a really good reason. And they better make the tough decisions needed to keep profits strong. 

Nonetheless, how much control do the executives have if everyone else can achieve their goals and earn a bonus or raise regardless of margins? In most companies, all the groups mentioned above can personally thrive while profits go down the tubes.

Everyone plays a role in company profits. Everyone needs to be responsible for a piece of it. And at the top, the data must be there, the analysis must happen, the tough decisions must be made, and the goals and responsibilities needed to support growing margins must be driven into every corner of the organization.

Uncommon Meetings - 7 Quick Tips for Better Results in Half the Time

You can find it on my website, Amazon, and Barnes & Noble. As usual, print editions purchased from my website come with a value-packed bookmark and may be personalized.

Spread the word so you don't have to attend any more wasteful meetings!

[If you have a copy of "The Meeting Clarity Handbook," an early release PDF version, everything is the same except the title.]

I just finished Unbroken: A World War II Story of Survival, Resilience, and Redemption by Laura Hillenbrand. It's an amazing and gripping story. I highly recommend it.

I believe reading books like Unbroken, which paint historically accurate pictures of wars, famine, the depression, and other catastrophes, is a good way to keep life in perspective and restore our faith in our ability to survive, grow, and emerge stronger than ever in the face of adversity.

And, of course, while immersed in a good book, you can also escape the bad news and disappointment for a few hours.