Growth is great for a business.  Growth creates opportunities for employees, helps companies attract top talent, creates economies of scale, and creates shareholder value. When done successfully, growth just seems to make running the business easier. The trick is that successful growth is not that easy. You need to have the right structure, capabilities, activities, […]

We are making a small profit; all is good, right? The answer to this question all depends on how you define profit. The standard accounting definition of profit, revenue minus expenses, unfortunately does not tell the whole story. The management guru Peter Drucker put this more eloquently than I ever could when he said the […]

Return on equity (ROE) is a measure of how much return a company generates with the money invested by its shareholders. ROE is typically measured by dividing net income by average shareholder’s equity. ROE can be increased in several different ways with different implications for shareholders; therefore, it is an important measure for owners to […]

A business unit should be closed if it consistently under-performs, has a net operating loss, and will likely continue to do so in the future. This statement sounds true – this should be an easy decision. Closing the business unit, however, could be exactly the wrong thing to do and could end up hurting a […]