Islands of Profit in a Sea of Red Ink: Why 40 Percent of Your Business Is Unprofitable and How to Fix It
Just as they do on “Dancing With the Stars,” let’s begin with the positives. Jonathan Byrnes lectures at MIT, runs his own consulting company, and, if the book jacket is to be believed, advises more than fifty major companies and industry associations. Those gigs must be going pretty well because Byrnes lives in Lexington, Massachusetts, a pricey Boston suburb where property values endure despite the recession.
Now the bad news: For unaccountable reasons, Byrnes was unable to resist contributing to the poverty of business literature, a field which generally resembles medicine before they discovered germs. His book purports to be about red ink; yet somehow no red flags were raised by his publisher about a manuscript of almost 300 pages but devoid of bibliography or footnotes beyond the single entry listed on page 132. I counted a total of six figures, five of them illustrating notional customer “profit maps.” The net effect: chapter after chapter of assertions unsupported by anything approaching evidence.
The origins of what Byrnes’ “action-oriented format” apparently result from his column in an e-newsletter distributed by Harvard Business School. His 50 columns on “profitability management” provoked applause: “My in-box was flooded with dozens of emails from managers agreeing with my conclusions. The bow-wave of momentum eventually included “thousands of managers. To this day, no one has disagreed with my conclusions.” So much for methodology—or for naively assuming that blogosphere notoriety easily translates to those technological throwbacks called books. It is like the overweight soap opera queen banished after her first DWTS outing, disconsolate after under-estimating the ballroom’s extraordinary demands for precision, style, and a certain amount of grace.
Byrnes or his publishers at least deserve credit for laying out the book’s 36 chapters (most of them mercifully brief) in a reasonably succinct fashion: “New CFO Role: Chief Profitability Officer” and “Is Your Organization Reptile or Mammal?” One or two pages in each of those chapters are devoted to summaries of the points just covered and previews of “what’s next.” The core message is valuable if unexceptional: a rigorous focus on profits, alignment around the core competencies producing those profits and creating the tight relationships that insure profits by both suppliers and customers.
The usual suspects of any business book are also mentioned—Dell, GE, Proctor & Gamble, and Walmart—but never in any depth and of course without footnotes or other evidence. The overall effect is like reading your car’s operations manual: valuable as far as it goes but you look for a mechanic whenever the “idiot light” comes on. And there are times in Red Ink when you realize that publishing conventions are there for a reason. On page 31: “The ‘offensive terminal point’ is a key concept in military strategy. It refers to how deeply a military force can penetrate its enemy’s front lines. The more an army concentrates its forces on a narrow front, the deeper it is able to penetrate a battlefield.” There is no way to tell, but if Byrnes is referring to Clausewitz’ famous teaching on the “culminating point of victory,” then he has seriously misrepresented a lesson best summarized as “knowing when to quit.”
American companies and the managers who run them should be concerned about the issues Byrnes raises in this book. Too many of those managers have been raised in corporate cultures more concerned with perks and privileges rather than with profit on the investments forked over by shareholders. But his book would be a far better investment had Byrnes simply provided a straightforward case study of his methodology—with the names, facts, figures and footnotes permitting readers to draw their own conclusions.