A recent article in the Supply Chain Management Review notes that, for CFOs, these days, Survival Trumps Profits. This is a step in the right direction as it’s not all about the almighty dollar, and, more specifically, how many of those almighty dollars you can bring in this quarter, it’s about doing good, doing right, and being around for the long term. After all given the choice between 1,000,000 in profit this year, and potentially going out of business tomorrow, or 500,000 this year and at least 500,000 a year for the next ten years, I’ll take the 500,000 a year because no investment vehicle is going to quintuple my investment in 10 years.
The article, which summarized a recent study commissioned by Basware and produced in cooperation with Indiana University’s Kelley School of Business and the University of Navarra’s IESE Business School, noted that most corporations these days are doing one of the following:
- relentless restructuring
slashing expenses, massive layoffs, and other drastic measures - cash flow
cracking down on late payers, reducing customer payment terms, and extending supplier payment terms - the “holistic” approach
integrating with procurement, eliminating siloes, and making operations transparent
But only one of these is the right approach. Can you guess which one puts you on the right track to building a long-term success story and, in comparison, which two put you on the fast track to failure?