The Profit Zone

Market share was the grand old metric, the guiding light, the compass of the product-centric age. Companies focused on improving their product and building economies of scale. This product-centric thinking led to the battle cry: "Get more market share and the profit will follow."

"Be in high-growth markets." In the old economic order, in the age of market share, volume growth was a guarantor of success. Growth was what we were taught to pursue. It created higher profits for all, including market share laggards, companies with poor business designs, and companies that were poorly managed. A rising tide raised all boats. One manager articulated the classic view: "There are no management problems that volume growth can't solve. Even if we manage poorly, rising revenue helps cover the mistakes we made."

The profit zone is the area of your economic neighborhood where you are allowed to earn a profit. To reach and operate in the profit zone is the goal of every company.

The number one problem in business today is profitability. Where will you be allowed to make a profit in your industry? Where is the profit zone today? Where will it be tomorrow?