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Wednesday, November 23, 2011

Profit vs Innovation

The problem lies with the business schools which are at fault. What we’ve done in America is to define profitability in terms of percentages. So if you can get the percentage up, it feels like we are more profitable. It causes us to do things to manipulate the percentage. [...] Christensen even suggests that in slavishly following such thinking, Wall Street analysts have outsourced their brains.

Clayton Christensen: How Pursuit of Profits Kills Innovation and the U.S. Economy in Forbes. Hat tip: Lane Becker.

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