Who's Responsible for Profits-and-Losses?

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Think of a burger chain.

  1. A store manager is responsible for profits-and-losses at their individual store.
  2. If s/he goes into the red for a quarter, you know who's accountable.

Yet, $^!@ companies put one person responsible for the company's P&L: The Boss.

That's it.

The Issue With Sole Power

Putting too much power into one person:

  1. diminishes your profits
  2. slows your growth
  3. will destroy the company if the person commits one oversight

Instead, organize your company like a chain of burger chains:

  1. Someone's responsible for the P&L of a small group of employees/area/customers.
  2. That means hiring/firing/marketing/the-yaddas.
  3. If the person can't consistently achieve a healthy-profitable quarters, PINK SLIP.

You start diversifying power from the boss, and forcing a subset of people to optimize their bottom-lines.

Result: You start optimizing your company from the top-down-all-around.

Diversifiy P&L.

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Posted on January 18

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