We are in the publishing business to produce books. The measure of our success is whether we are efficiently producing high-quality books that meet our customers’ demands. Money is the benefit that results from our efforts; it is not the product.
For many executives, money provides an objective measure for performance; it serves as the basis of how they are evaluated by their board, it is the yardstick for their decision making, and it is how they reward employees (i.e., the more profits you generate, the greater the portion of those profits you receive). In a comparison of incomes, one could conclude that higher income means a higher level of success. But suppose a higher income was due to a sale of assets, whereas lower income was the result of capital investments meant to foster future growth. In this scenario, higher income does not necessarily reflect greater success. The same can apply to evaluating profit. If a project’s revenues exceed expenses, you could conclude that it is profitable. But suppose higher profit came despite bad practices, whereas lower profit was derived within a system that fostered long-term success. Which endeavor would be more profitable? Many factors contribute to income and profit. Those factors can be external to the work we do.
This is especially important to understand when viewing the process of creating a book. If money drives the process, we often focus on cutting costs. If the costs to edit, typeset, and print a book seem high, we lay off staff and engage outsiders to do the same work. If these outsiders charge too much, we coerce them to work for less under the threat of losing our business. On a line-item statement, this might make sense. But in a typical business scenario, this introduces problems.
Within publishing, the emphasis on lower costs and higher profits seems to be driven by corporate management that focuses almost solely on the money. As we know from stories of mergers and acquisitions, the balance sheet is not the whole story. Lowering costs does not necessarily lead to efficiency; rather, it often increases workload, stress, and errors. In the short run, increasing employee output might decrease costs; however, the current shift in publishing demonstrates the risks and shortsightedness of this approach. As market changes introduce new demands and output requirements consequently change, publishers are struggling to adapt. We are putting off much-needed changes (both known and required) because we think we lack sufficient resources (both human and financial). We allow systems and practices to become antiquated, and employees fall further and further behind in the knowledge and skills required to function in the new publishing world. We blame this on an inability to afford upgrades or training.
We cannot continue to use revenue as a strict measurement of success. We also need to consider a number of other factors, including future viability. We need to develop a balanced sense of profit and growth—one that ensures the continued development of our business. We need to decide whether cost savings derived from outsourcing and other methodologies position us as the experts in the field or doom us to redundancy. We invest heavily in the research and development of titles, but perhaps we need to apply R & D to our roles. We are facing a new situation in publishing. Money might pay the bills, but if it’s our only measure of success, we could get caught in the red.