Tuesday, February 28, 2017

Complex Things

Business can be quite complex in its operation, but its not complex in how you determine success or what to do.  Does it make enough profit provides a clear answer to most decisions.

Yes sometimes other factors enter in, but ultimately it is the bottom line that matters.

Sometimes determining what the bottom line will be can be very hard and sometimes not so much.

However, if something will make enough money the decision becomes fairly easy.

Some people have a real talent at seeing this and they are frequently your most successful CEOs.

Of course some make bad decisions and have bankruptcies and failures but the future is clearly always somewhat uncertain.

However, once you eliminate the profit element it gets more complex.

The Government works in an area where the services asked for are often unlimited and are provided despite their cost.

The defense department is not a profit making operation and has to determine spending priorities based on other outcomes.

Similarly the VA, Homeland Security, State and other departments have to perform a mission without being able to measure profit or loss.

Of course in the operation of those departments there are similarities to how company's operate with payroll costs, equipment and day to day operations, but there is no profit or loss at the end of the day.

In addition, the people you serve are generally quite demanding, the oversight is never ending nor is the second guessing.

Like a sports official, the best outcome is to actually not be noticed, because being noticed is generally the result of some failure.

This add a complexity to Government that is absent form private business, namely what is success.

Of course the ultimate success in Government is to get reelected, but the heads of Agencies don't run in elections.

The final complexity in Government is that while companies have Board of Directors to question a CEO as well as stockholders, the Government has two branches of Congress and the electorate which all have different goals. 

We have some interesting times coming.

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