Management matters
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continued
are made and it is significant that large companies, not least in America, increasingly expect their managers to have regard to amenity, environmental and social factors, in addition to the profitability factor.
Profits come first
The NFC stresses that profitability must remain top of the list of priorities even after a reasonable level of return on capital has been achieved. It notes the risk of financial stability being rapidly undermined by inflationary pressures and says baldly that "this requires the firm encouragement of a philosophy of commercial initiative and robust decision-making uninhibited by non-commercial considerations".
But, the report goes on: "The Corporation does not regard itself as existing solely to make a profit. If it is to develop the role of 'pacemaker' in transport, in matters where environment and human values are involved, it must succeed in being profitable. Only then can it make the contribution it would seek in responding to the needs of its staff and in the blending and marketing of competitive service and price to its customers."
The NFC deserves credit for its continual goading of managers into seeking profitable business "of the kind others cannot do or have not thought of doing". This inspires the reflection that there are limitations in transport market research: often, a new service must be provided before customers know that they like it!
In setting up a property committee of the board in 1971 to consider schemes for joint property development, outright sale and the alternative use of existing premises the NFC jumped on to a profitable bandwagon — it was not alone. Assets converted into cash flow have reduced demands on public finance and have brought nearer the chance to consider equity financing and joint ventures with private enterprise. In principle, all the techniques used by the NFC to improve profitability are open to the small firm.