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How to improve its profit baseline

by:ORK      2022-11-18
My parents are mathematicians, and my brother and I have been learning computing since we were 8 years old. In college, I studied math for two years, during which time I got fed up with professors using three full blackboards to prove an intuitively obvious question. In the years that followed, I benefited from my mathematics background in many ways, but as a businessman it was crucial that I had to forget the mathematics I had learned and never spend a minute on something I knew the answer to. Quantify it, and never take the time to quantify something that you feel is highly probable and reasonable. I recently met the head of a small health care company who told me that they decided to spend $50,000 in consulting fees to estimate the size of the overall market, the company knew its market share was less than 1%, but they also wanted to know, If the market size is 2 billion, 3 billion or 4 billion, is its own market share 2/10 of 1% or 1/10? Actually who cares about you!!! What this company should do is how to improve its market share Profit baseline, how to take 1/10 of that 1% in market share, instead of quantifying this huge market. Instead of spending $50,000 on digital games, spend it on direct sales. This example is a bit excessive, but the phenomenon is very common. Many companies quantify everything just to look good. Quantification takes time and money and doesn't help its profit baseline. Another executive I know insists that people make profit forecasts by month, quarter, and year, and then keep updating those forecasts. Another harm he did by tying his best employees to these forecasts was that they would use precise (or imprecise) information to meet the executive's desire for precisely predicted profits. No one can make a penny from predictions. Optimistic profits come from the business itself rather than forecasts for it. For most businesses, I would cut 80% of the people working on forecasting and numbers games, and time should be spent making money, not counting. When I was at Harvard Business School, I knew a professor who taught us this trick: any time you are faced with a decision in which you are unsure, give you two seconds to decide, don't hesitate, make it right away, Then do whatever you have to do. Because no matter how much time you spend, or how much research you do, the results are often the same. In the many years since I learned this trick, it has worked every time I use it. Many executives want more digital reports than they actually need, and good executives often make instinctive decisions based on limited data. The quantification that mediocre executives talk about is actually a phantom: they make decisions based on quantifiable data, not the most important information. In all business decisions, most of the key variables can only be judged, evaluated, and not quantified through experience and intuition. That is, being approximately right is better than being exactly wrong. Company website: https://www.orksealing.com/
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