I've been going on (and on and on) about the issue of Profits as Primary Goal. (The rantings were prompted by this article.)  In my last post, I said that the Profits as Primary Goal (PAPG) didn't assure that the organization will actually do anything worth a damn that will even remotely assure the realization of said profits.  In other words, PAG doesn't drive worthwhile action.

In fact, I'd argue that PAPG too often actually hurts the organization because leads organizations away from good strategy.  Strategy that focuses on development of sustained competitive advantage based on innovation, development of distinctive competencies, and providing value to customers.

PAPG too often leads to cost cutting as a primary strategy.  It too often leads to short term thinking and acting rather than longer term.  It too often leads to a reluctance to make investments in anything that the accountants can't develop a three month ROI for.  It too often leads senior execs that elements like clear visions, values, strategies, and goals are superfluous.  It too often leads managers to think that "soft skills" like truly working together as a team are just holding hands around the campfire and not really related to solid business results.  (Trust me, your OEE's and equipment Cpk's aren't what they should be a because of poor teamwork and poor communications but that's another discussion for another post.)  It too often leads manufacturing organizations to do things that are directly counter to good practice, like make lots of stuff even though nobody wants it, ignore maintenance, make purchase decisions based only on purchase price and not total cost of use, purchase new equipment with no input from the folks that will have to operate or maintain it and on and on.

So, PAPG isn't merely ineffective...it can be downright harmful.