Revenue Up, Profit Down?

“The reason we called you in,” Derrick explained, “is that we have a margin problem. We’re just not as profitable as we should be.”

“How do you know?” I asked.

“Easy!” he said. “Revenue is up and profit is down.”

“How do you think that happened?”

Derrick took a moment. “We’re a bit stymied. Every time we figure out the problem, and think we have it fixed, at the end of the month, the numbers tell the same story. Revenues up. Profit down.”

“I tell you what I would like to see. Could you get me a copy of your org chart?”

“Our org chart?” Derrick looked at me like I was from Mars. “I said we have a profit problem, why do you want to see our org chart?”

“Derrick, you’ve looked all over, trying to discover what is wrong. Your problem is not a what. Your problem is a who.”

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