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I really like this quote: "The way we measure profitability is in ‘tons of money’."

I couldn't help but hear a loud 'cha-ching' in my head when reading this. I makes sense though, having a lot of money in the bank enables a business to make bold moves. I think its a delicate balance between making more sums of money and being more profitable.

Silly side note and stupid metaphor warning - if someone is right-handed, they never think to cut off their left hand just because they get less return or use out of it. Only when someone if forced to choose between the hands would they ever say, ok cut off my left hand and save my dominate hand. Thats like an extreme situation!

But in business, these companies make extreme moves like this, exiting whole biz sectors/markets, eliminating depts, segmentation etc. Add to this, that the bar is continuously raised, so if the factory quota for last year was x this year its x + 10. Thus 5-10 years later the exec's are surprised when the factory is not meeting "quota" and shutter it in the name of profitability.

Profitability is one issue, but I think the trend toward over optimization and greater year-over-year ROI is also to blame.