Profitability vs. growth
Read this extract from the introduction of a must-read new book The Three Tensions by Dominic Dodd and Ken Favaro.
“A manager argued that he could either increase his business unit’s margins or its sales, but not both.
His chief executive reminded him of the time when people lived in mud huts and faced the start choice between light and heat: punch a hole in the side of your hut and let the daylight in, but also the cold; block up all the openings and you stay warm, but sit in the darkness.
The invention of glass made it possible to overcome the dilemma — to let in the light, but not the cold.
How then, he asked the sales manager, will you resolve your dilemma between no sales growth and no margin improvement?
Where is the glass?”
The challenge for marketers is not to become more profitable or to find new sources of revenue. The challenge is how to do both at the same time.
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