Are Profit Dollars Slipping Through Your Fingers?

Abstract

In tod a ys bu sin ess clim ate profitability is a topi c of end less di scu s-
sion . M ana gem ent gurus pen book after book outlining new strategies
and conce p ts for bu sin esses to explore. At the same tim e, Wa ll Stree t
repeatedl y tells man y corpo ra tions that they are not paying consisten t or
lar ge eno ug h di vid end s to shareholders.
At one time rev enu e gro wth, corpor ate image or lon gev ity may
have influenced ana lyst recomme nd ations to inve stors, bu t no m or e.
Co m panies, eve n trad ition ally sound Fortune 500 organizations w ill be
pa ssed over for be tter short term investments if they d on ' t retu rn divi -
d end s to share hold ers. So with all the study focused on profi tabi lity, is
it possib le tha t a sim p le and th orou ghl y effective a pp roac h has been
missed by man y com panies?
The sim ple ap proach I am referr ing to is cutting ope ra ting costs for
energy by inves ting in efficiency. Reducing ope ra ting bud gets is cer-
tain ly not a new idea, but it seems that othe r line item expe nses are
typ ically the tar get for such cuts. It is commo n to see a dve rtising bud gets
ge t slashed, as well as salary an d frin ge area cuts thr ou gh outso ur cin g
and dow nsizing of staff, to nam e a few . The in teres ting thing abo ut
ene rgy costs, is that mana gers tend to view them as fixed cos ts, like a
mort gage, and ass ume that they canno t be cut.
Dur ing the 1980' s man y orga niza tions di scover ed thi s was not true ,
and they liber ated p rofit dollars by puttin g emphasis on ene rgy cos ts.
Since th en , thou gh , man y have lost sigh t of the op por tuni ty av ailable to
redu ce costs in th is wa y. Yet the term itself "e fficiency" says it all