The high cost of record-breaking US corporate profits

By William Seidman  In the third quarter of this year, US corporate profits were the highest on record, and achieved at a tremendous cost:  jobs lost and little or no improvement in long-term capability.   The focus has been on cost-cutting. Few performance improvement initiatives were funded. Meaningful leadership development was mostly neglected as an unnecessary and ineffective expense – after all, what expertise is needed to cut costs? In 2011, companies that are able to emerge from the recession-driven fears will realize that they lost two years of performance improvement. In the US, this might not matter very much since most companies were similarly regressive. But the world wasn’t sitting around. During the time the US was losing momentum, India and China continued to move forward aggressively. After two lost years, US companies will need really smart leadership – but many of these companies will simply pull out the old, tired leadership programs that haven’t worked before.  A few companies are already starting to gain competitive position by using our approach to leverage their positive deviant leaders and create a broad spectrum of performance improvement initiatives. They are already moving more rapidly than their US competitors and gaining global strength. Companies that use tired programs or wait much longer are putting themselves at real risk:  having survived the recession, they may well die in the recovery.]]>

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