May 23, 2016

Who cares about the bottom line?

Andy Kessler is the star of his class reunions. His education – undergrad and grad – focused on electrical engineering. He worked on computer chips but found his wiring more akin to poker chips: his real street cred broke free as a business analyst, investment banker, venture capitalist and hedge fund manager. He’s become an author, with multiple books and articles flowing from his keyboard.

Kessler’s opinion piece in today’s Wall Street Journal hits the Class of 2016 in the solar plexus: “Dear Grads, You Need a P&L” (click to read). For the grads who listened to Bernie Sanders sound-alikes in classrooms for four years and received a student debt payment book as a going-away gift, he’s connecting-the-dots of their confusion with reality: without profits, they’d have no iPhone. Their Prius came from a system that demands results; Starbucks makes money from making their Triple, Venti, Half-Sweet, Non-Fat Caramel Macchiato. The building on campus where they slept for four years is named for a Capitalist, who made some money and gave a pile of it to their now-alma mater to build the co-ed dormitory. Who cares about the bottom line? They should…

Any business has to be aware of its multiple constituencies: employees, who produce and deliver the product/service; customers, who consume and compensate; investors, who buy stock anticipating a return; and, founders/principle owners, whose original intent is the purpose for which the enterprise exists. Try to operate a business without a bottom-line profit, and every constituency ultimately suffers.

Free markets reward businesses who have raving fans in each of the four groups. The system favors companies who produce value on every level. Business failure – if perceived in advance – creates a rush for resources: employees, customers and investors rush to protect their own interests… ultimately, to the harm of everyone involved, most especially the founder/principle owner.

Ministries may be non-profit, but they operate like businesses. The Founder/Principle Owner’s bottom line: “You did not choose me, but I chose you and appointed you so that you might go and bear fruit – fruit that will last…” (John 15:16)

The men in the Upper Room – the 11 Apostles, after Judas left – were the leadership team trained by the Founder/Principle Owner to take over the operations after he returned to Headquarters. He had come to lay the groundwork for a movement that would quickly become profitable. People – redeemed from Hell and gifted with Heaven – were the bottom-line when He died on the cross. The first converts at Pentecost put the Kingdom in the profit column, and that measure has remained the ultimate objective of His Company, from then to now.

Think about your relationship to the Company: you started out as a customer, when you traded death for life. You continued in that status while maturing in your faith. Some Christians remain customers for the duration of their lifetime; was that the Founder’s original intent?

You’ll get Heaven someday, because the Company’s contracts are honored for all customers (Christians). If that’s all you want, you’ll be happy. The smartest customers read the Prospectus (Bible), become employees (most are volunteer staff, who will be paid later by the Founder/Principle Owner), and – ultimately – become investors (donors), to participate in the success they see around them.

My advice: only work for and invest in for-profit companies that produce profits. Even more crucial: only work for and invest in non-profit ministries that produce fruit.

That’s the bottom line. It’s important to the Owner; it had better be important to us…

Bob Shank