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The Failure to Create Value Is - Well - Failure

Posted by Doug Davidoff

Sep 18, 2008 8:30:49 AM

While I don't enjoy the ride, I say good riddance to the vast array of companies of have gone out of business this year.  Merrill Lynch, Fannie Mae, Freddie Mac, AIG, Lehman, Bear Stearns and I'm sure many others.  Please know, I feel for the people that work there (I worked at Merrill, and I have many friends and associates who still work there and at the others).

Why so crass?  Because all of these companies forgot that profits are supposed to come from creating value - not from manipulating transactions.  The one thing every company I mentioned has in common is that they thought of profit as a number on a financial statement.  They all failed to ask the questions:  "How are we creating profit?  Is there any real value there?"

Had they answered those questions, they'd still be around creating value for all of us.

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