The Art of Profitability
An extraordinarily new business slant on how companies can generate greater profits. Presented in 23 compact lessons, "The Art of Profitability" features an ongoing tutorial between two fictitious individuals.
really understand how to react like a Marc Geron—other than to throw him into the pool and see whether he swims? Instead of which I’m telling him stories about the world’s greatest swimmers… oh, they’re entertaining, no doubt. But are they anything more than that? Zhao suddenly realized that someone had been knocking on his door. “Come in!” he called. It was Frances. “Good morning, David! I’m just here for an hour or two—got to print out the latest draft of that report on the structure of the
page, turned it over, and handed it back. Steve opened his mouth as if to speak, shut it, opened it again, and ﬁnally chose silence. Shaking his head, he folded the page and tucked it into his shirt pocket. Zhao asked again, “What do you think a Proﬁt-Multiplier model might be?” “Taking a proﬁt and doubling it?” “Yes, but how?” Steve sat back and began thinking. Seconds went by in silence. Steve’s eyes searched the corners of the room, as though an answer might be lurking there. A minute
money managers. “The story starts in 1989. Back then, in my economic research days, I was working with a software company that got into the information business. They were a bunch of rock-and-rolling ﬁnancial buccaneers. They acquired a small ﬁrm—I’ll call them Data House—that sold ﬁnancial, corporate, and economic information to money managers, investment banks, corporate libraries, commercial banks, and professional service ﬁrms. Not a bad concept, but one that called for smart execution to
together, and monthly portfolio reviews resumed. For every project, the same hard questions got asked every month. The level of preparation rose dramatically. The answers got better, more accurate, more realistic, more supported by data. “Our ﬁrst big breakthrough came in March, when a project leader gave a presentation to the portfolio review team that killed his own project. Three million dollars a year of spending got shut down. “Ann responded brilliantly. She promoted the project leader
before it became well known. So Burton understood the dramatic differences in proﬁt potential among the various components of Coke’s business. And after looking into book retailing, Burton saw the potential to recreate the same effect in the independent bookstore business.” “How so?” “Burton recognized that the bookstore itself could be a base for building several new high-proﬁt components: the corporate business, the book-group business, the personal service business. After several months of