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Thought leadership and innovation for the Pharmaceutical Industry

Upon reflection, there are a number of misconceptions in business and many more ideas, concepts, and scenarios better categorized as bullsh_t.

Upon reflection, there are a number of misconceptions in business and many more ideas, concepts, and scenarios better categorized as bullsh_t. In todays competitive environment, organizations are full of executives and wannabe executives who purport to be absolutely focused on the bottom line. Many have built careers based on the mythology that surrounds their intense bias towards the bottom line.

The bottom line is usually used to describe an emphasis on sales and profits. On the face of it, that makes sense. After all, we exist to grow both these numbers, as our shareholders demand. After a period of deliberation on this matter, I am totally convinced that this thought process is flawed, suboptimal, and perhaps ineffective. Bottom line focus sounds good to talk about, but it is not so effective in practice.

The bottom line executive is concerned with all things that have a number, specifically sales and profits. So every interaction is judged with very clear criteria. How does it drive the bottom line? If only everything in life was that simple

Unfortunately, often there are multiple steps between actions, decisions, and the so-called bottom line. This is the beginning of where this thought process gets stuck. These executives cannot see past the end of their noses and therefore never plan adequately for the future. Since they care only about those things that they deem to impact bottom line, many intangible yet invaluable activities are done away with.

We know that understanding our customers, as well as developing and delivering appropriate value propositions to them, is the key to long-term success. But the sales orientation of the bottom line thinker never allows the building block activities that drive strategy to occur. In the end, we have executives who become very effective at getting results over a short period of time and when the environment changes, the lack of sophistication and preparation bites.

Bottom line focus might give the impression of a no-nonsense management team. It is worth remembering that it also indicates a no-sophistication management team. It is because of these individuals that the balanced scorecard was developed. Emphasizing the role of many intangibles in ensuring organizations are successful in not just the now but also the then.

When next you come across these sales-focused executives bluffing their way through the corporate ranks, do not be intimidated by their bravado but understand that customers and intangibles like strategy and innovation have a big role to play in the achievement of long-term success. The pretenders are always found out.

If you are still not convinced, ponder the recent furore among some surgeons and devices companies over alleged improper payments. Which side of the story do you think the short-term, narrow minds of the bottom-line thinkers lay?

In the end, there is a lot to be said for having some focus on sales and profitsas long as we remember that these are achieved as a result of other activities. A balance is required because bottom line executives miss out on customers, and therefore eventually end up at the bottom.