Optimizing profitability is destructive

morreale Sunday 20 of November, 2011
I've thought that the way business optimizes profitability over everything else is short sided, destructive, kills jobs, not in the interest of national security, wasteful, and unsustainable for a while now (externals are important and should be counted). To my amazement, Clayton Christensen is saying what I've been thinking but couldn't put into words in this article at Forbes.com Clayton Christensen: How Pursuit of Profits Kills Innovation and the U.S. Economy. The two metrics Internal Rate of Return (IRR) and Rate of return On Net Assets (RONA) seems to be the culprit. Professor Christensen gave a really wonderful lecture at the Gardner Symposium ITXPO 2011 on innovation, disruption, and how American business theory is destroying the economy. The lecture is well worth watching.

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