Corporate Finance, DeFi, Blockchain, Web3 News
Corporate Finance, DeFi, Blockchain News

Maximizing profitability: The three ingredients you may have misplaced

This week I met with a new financial advisor, obtaining some insights on how to better manage our investments. It became painfully apparent during our discussions that our current investment portfolio was weak as a result of over diversification, lack of investment performance, and most importantly a lack of oversight and management of the portfolio.

Shawn Casemore
Shawn Casemore
It struck me following the meeting that these are the very same factors that result in poor financial performance in business.

Firstly, I would argue that ineffective leadership has delivered more significant examples of rapid business erosion than any other single factor. From the scandal that rocked Enron, to the poor leadership decisions resulting in the financial deterioration of Swiss Air and Polaroid, meager leadership is the single greatest detriment to business profitability.

Diversification can be a good thing, so long as offerings align with the intended value proposition. Organizations that are too diverse lose focus on their core competencies, confusing their brand and reducing overall market effectiveness (I call this the “jack of all markets, master of none” business plan). You don’t have to search for too long before stumbling across examples of organizations struggling with this challenge today. Sears and Canadian Tire are two that immediately come to mind.

Lack of performance in business can have the same detrimental impact as lack of performance in investments. RIM for example, has clearly succumb to a lack of business performance plagued with late product launches and numerous quality issues, resulting in the rapid dissension from their once dominant market position. Despite the best leaders and a clear market focus, if high quality products or services can not be consistently delivered, customers will quickly vanish.

Fortunately we can find resolve to avoiding the same fate as these organizations by focusing our attention on management of these three fundamental areas:

1. Instill strong leadership with a vision for the future and the power to deliver.
2. Identify and pursue markets that align closely with your value proposition.
3. Invest in, manage and optimize the trilogy of People, Process and Technology

Considering how the weaknesses in my investment structure were explained, my choice for resolution seems clear. Considering the examples we have used to demonstrate significant business failures, you should find clarity in identifying those areas in which investment of time, money or talent will maximize performance.

Shawn Casemore, President, Casemore and Co.

Mardi 23 Octobre 2012