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Too much of a good thing how four key survival traits are now killing us - Too much of a good thing - Business in America


The last year has seen a slight dip in aggregate profits because of the high dollar and the effect of the oil price on energy firms. But profits are at near-record highs relative to GDP (see chart 1) and free cash flow—the money firms generate after capital investment has been subtracted—has grown yet more strikingly. Return on capital is at near-record levels, too (adjusted for goodwill). The past two decades have seen most firms make more money than they used to. And more firms have become very profitable.

An intense burst of consolidation will boost their profits more. Since 2008 American firms have engaged in one of the largest rounds of mergers in their country’s history, worth $10 trillion. Unlike earlier acquisitions aimed at building global empires, these mergers were largely aimed at consolidating in America, allowing the merged companies to increase their market shares and cut their costs. The companies in question usually make no pretence of planning to pass the savings they make this way on to their customers; take their estimates of the synergies involved at face value and profits in America will rise by a further 10% or so.

Profits are an essential part of capitalism. They give investors a return, encourage innovation and signal where resources should be invested. Their accumulation allows investment in bold new ventures. Countries where profits are too low—Japan, for instance—can slip into morbid torpor. Firms that ignore profits, such as China’s state-run enterprises, lurch around like aimless zombies, as likely to destroy value as to create it.

The last year has seen a slight dip in aggregate profits because of the high dollar and the effect of the oil price on energy firms. But profits are at near-record highs relative to GDP (see chart 1) and free cash flow—the money firms generate after capital investment has been subtracted—has grown yet more strikingly. Return on capital is at near-record levels, too (adjusted for goodwill). The past two decades have seen most firms make more money than they used to. And more firms have become very profitable.

An intense burst of consolidation will boost their profits more. Since 2008 American firms have engaged in one of the largest rounds of mergers in their country’s history, worth $10 trillion. Unlike earlier acquisitions aimed at building global empires, these mergers were largely aimed at consolidating in America, allowing the merged companies to increase their market shares and cut their costs. The companies in question usually make no pretence of planning to pass the savings they make this way on to their customers; take their estimates of the synergies involved at face value and profits in America will rise by a further 10% or so.

Profits are an essential part of capitalism. They give investors a return, encourage innovation and signal where resources should be invested. Their accumulation allows investment in bold new ventures. Countries where profits are too low—Japan, for instance—can slip into morbid torpor. Firms that ignore profits, such as China’s state-run enterprises, lurch around like aimless zombies, as likely to destroy value as to create it.

Social media and I have been on a break for one reason or another this past six months. This has included Twitter and blogging which I love dearly but thought it best to rest from since there are only so many hours in the day and with increasing demands from both work and home, something had to give. The respite has been an interesting time for me as it has allowed me to reflect on a world that I had immersed myself in so willingly and has given me the opportunity for perspective.

The reality is that there are merits to both philosophies that children can benefit from. Students in my classes have most certainly benefitted from direct instruction, and solo deliberate practice which I have implemented with much vigour and enthusiasm this year. Equally, they have had success from their receipt of teaching methods more akin to progressive methodologies. A picture which I’m sure mirrors classrooms throughout the country, no labels here please.

I wonder if you’d mind me asking a couple of things #4MyResearch?
Having taken a break from social media, I was wondering what brought you back, or did you have a specific period in mind when you began?
I’m interested in how something as brief as a 140 character tweet can have an influence on a teacher’s practice (and subsequently their pupils’ outcomes?). Can you identify the steps between something you see on Twitter, and the point at which your practice has been developed? And on that theme, you mention also developing the practice of others (presumably non-tweeters?). Can you say a little about how that works?

This content has not been reviewed within the past year and may not represent WebMD's most up-to-date information.

To find the most current information, please enter your topic of interest into our search box.

To get at the roots of profit-destroying complexity, companies need to identify their innovation fulcrum, the point at which the level of product innovation maximizes both revenues and profits.

What’s the number of product or service offerings that would optimize both your revenues and your profits? For most firms, it’s considerably lower than the number they offer today. The fact is, companies have strong incentives to be overly innovative in new product development. But continual launches of new products and line extensions add complexity throughout a company’s operations, and as the costs of managing that complexity multiply, margins shrink. To maximize profit potential, a company needs to identify its innovation fulcrum, the point at which an additional offering destroys more value than it creates.

The usual antidotes to complexity miss their mark because they treat the problem on the factory floor rather than at its source: in the product line. Mark Gottfredson and Keith Aspinall of Bain & Company present an approach that goes beyond the typical Six Sigma or lean-operations program to root out complexity hidden in the value chain.

The last year has seen a slight dip in aggregate profits because of the high dollar and the effect of the oil price on energy firms. But profits are at near-record highs relative to GDP (see chart 1) and free cash flow—the money firms generate after capital investment has been subtracted—has grown yet more strikingly. Return on capital is at near-record levels, too (adjusted for goodwill). The past two decades have seen most firms make more money than they used to. And more firms have become very profitable.

An intense burst of consolidation will boost their profits more. Since 2008 American firms have engaged in one of the largest rounds of mergers in their country’s history, worth $10 trillion. Unlike earlier acquisitions aimed at building global empires, these mergers were largely aimed at consolidating in America, allowing the merged companies to increase their market shares and cut their costs. The companies in question usually make no pretence of planning to pass the savings they make this way on to their customers; take their estimates of the synergies involved at face value and profits in America will rise by a further 10% or so.

Profits are an essential part of capitalism. They give investors a return, encourage innovation and signal where resources should be invested. Their accumulation allows investment in bold new ventures. Countries where profits are too low—Japan, for instance—can slip into morbid torpor. Firms that ignore profits, such as China’s state-run enterprises, lurch around like aimless zombies, as likely to destroy value as to create it.

Social media and I have been on a break for one reason or another this past six months. This has included Twitter and blogging which I love dearly but thought it best to rest from since there are only so many hours in the day and with increasing demands from both work and home, something had to give. The respite has been an interesting time for me as it has allowed me to reflect on a world that I had immersed myself in so willingly and has given me the opportunity for perspective.

The reality is that there are merits to both philosophies that children can benefit from. Students in my classes have most certainly benefitted from direct instruction, and solo deliberate practice which I have implemented with much vigour and enthusiasm this year. Equally, they have had success from their receipt of teaching methods more akin to progressive methodologies. A picture which I’m sure mirrors classrooms throughout the country, no labels here please.

I wonder if you’d mind me asking a couple of things #4MyResearch?
Having taken a break from social media, I was wondering what brought you back, or did you have a specific period in mind when you began?
I’m interested in how something as brief as a 140 character tweet can have an influence on a teacher’s practice (and subsequently their pupils’ outcomes?). Can you identify the steps between something you see on Twitter, and the point at which your practice has been developed? And on that theme, you mention also developing the practice of others (presumably non-tweeters?). Can you say a little about how that works?

This content has not been reviewed within the past year and may not represent WebMD's most up-to-date information.

To find the most current information, please enter your topic of interest into our search box.

The last year has seen a slight dip in aggregate profits because of the high dollar and the effect of the oil price on energy firms. But profits are at near-record highs relative to GDP (see chart 1) and free cash flow—the money firms generate after capital investment has been subtracted—has grown yet more strikingly. Return on capital is at near-record levels, too (adjusted for goodwill). The past two decades have seen most firms make more money than they used to. And more firms have become very profitable.

An intense burst of consolidation will boost their profits more. Since 2008 American firms have engaged in one of the largest rounds of mergers in their country’s history, worth $10 trillion. Unlike earlier acquisitions aimed at building global empires, these mergers were largely aimed at consolidating in America, allowing the merged companies to increase their market shares and cut their costs. The companies in question usually make no pretence of planning to pass the savings they make this way on to their customers; take their estimates of the synergies involved at face value and profits in America will rise by a further 10% or so.

Profits are an essential part of capitalism. They give investors a return, encourage innovation and signal where resources should be invested. Their accumulation allows investment in bold new ventures. Countries where profits are too low—Japan, for instance—can slip into morbid torpor. Firms that ignore profits, such as China’s state-run enterprises, lurch around like aimless zombies, as likely to destroy value as to create it.

Social media and I have been on a break for one reason or another this past six months. This has included Twitter and blogging which I love dearly but thought it best to rest from since there are only so many hours in the day and with increasing demands from both work and home, something had to give. The respite has been an interesting time for me as it has allowed me to reflect on a world that I had immersed myself in so willingly and has given me the opportunity for perspective.

The reality is that there are merits to both philosophies that children can benefit from. Students in my classes have most certainly benefitted from direct instruction, and solo deliberate practice which I have implemented with much vigour and enthusiasm this year. Equally, they have had success from their receipt of teaching methods more akin to progressive methodologies. A picture which I’m sure mirrors classrooms throughout the country, no labels here please.

I wonder if you’d mind me asking a couple of things #4MyResearch?
Having taken a break from social media, I was wondering what brought you back, or did you have a specific period in mind when you began?
I’m interested in how something as brief as a 140 character tweet can have an influence on a teacher’s practice (and subsequently their pupils’ outcomes?). Can you identify the steps between something you see on Twitter, and the point at which your practice has been developed? And on that theme, you mention also developing the practice of others (presumably non-tweeters?). Can you say a little about how that works?




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