Accession Number : AD1016061


Title :   Tying Profit to Performance: A Valuable Tool, But Use With Good Judgment


Descriptive Note : Journal Article


Corporate Author : Under Secretary of Defense for Acquisition, Technology, and Logistics Washington United States


Personal Author(s) : Kendall,Frank


Full Text : https://apps.dtic.mil/dtic/tr/fulltext/u2/1016061.pdf


Report Date : 01 Jun 2015


Pagination or Media Count : 4


Abstract : One thing I enjoyed about working in industry was that everyone in the private sector understood the definition of success: It was profit. If something did not make a profit for a business, then it was not good. Profit is the fundamental reason that businesses exist: to make money for their owners shareholders. Without profit, businesses die. From industrys point of view, more profit is always better. Not being profitable makes a company unsustainable and will lead to bankruptcy. Declining profits make it harder for businesses to raise capital or to invest for their futures. These facts make profit the most powerful tool the Department of Defense (DoD) has to obtain better performance from industry. It is important, however, to recognize that this also implies that over-aggressive use of this tool can seriously damage the institutions we depend upon for products and services.


Descriptors :   department of defense , defense industry , product development , life cycle management , contractors , military procurement , management planning and control , productivity , profits , military budgets , risk management


Distribution Statement : APPROVED FOR PUBLIC RELEASE