Through our experience it’s clear that companies driven with an overwhelming focus on short-term profits invariably meet one of three fates:

1. They fail to create their tomorrows, leading to a downward spiral of price-cutting as innovation is stifled. Ultimately the company itself may either be acquired or slide into bankruptcy in the longer-term.
2. They focus inordinately on products, not people, usually leading to employee disenchantment, disengagement and attrition. Often the best people leave. The best people leaving is arguably worse than losing a single product or market. As Andrew Carnegie said: ‘Take away my people, but leave my factories, and soon grass will grow on the factory floors. Take away my factories, but leave my people, and soon we will have a new and better factory.’
3. The company may enjoy short-term brand success but, ironically, if it cannot sustain it their brand may be tarnished irreparably. This often happens when a company loses focus of the people (bothe employees and customers) and becomes inordinately obsessed with the more ‘tangible’ areas of finance, advertising and products.

Sounds familiar? Well this post in the Telegraph offers hope to those of us who feel parts of the corporate world have got it terribly, terribly wrong.

Professor John Kay’s latest book (‘Obliquity’) asks whether profit maximisation is the way to maximise profits and attacks the obsession with rationality in companies. He gives example of people many of us are familiar with, such as Sam Walton and Bill Gates, and observes that ‘these people cared about the activity. The financial side of the activity was secondary. That’s not to say the financial side didn’t interest them at all, and they certainly made bucketloads of money, but in a basic sense that’s not what they were about’.

The real skill of management, according to Kay, is being able to select the right people and make good decisions and being given the autonomy to do so.

It’s the intangibles that matter…

We couldn’t agree more! Talent Technologies appreciates that the difference between all companies consists largely of their ‘intangibles’. Capabilities in other words like decision-making, identifying the ‘right people’ and making the most of them.

Other key intangibles companies need to continually harness are identifying future leaders, developing teams and creating outstanding customer experiences.

A review of Professor John Kay’s new book is here. What do you think? Share your comments below!

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