We Build Great Ships

“The worst crime against working people is a company which fails to operate at a profit.” ~ Samuel Gompers

In the early years of Hackbarth Delivery Service, the company that my wife, Carol, and I founded, we are the first drivers making deliveries. Bayou la Batre, a small town in south Alabama, is one of the destinations for some of those shipments. This quaint seacoast community is home to shrimpers, boat builders and companies that provide coastal services. On this particular day, I am making a delivery to a shipbuilder.

As I walk into the front office, immediately my attention is drawn to a sign on the wall. It is a mission statement, a document you often see on the walls of businesses across America. The message, in big letters, reads:

We build great ships,

At a profit if we can;

At a loss if we must,

But always, we build great ships.

Being mission-oriented, I love to engage in discussions that center on the purpose of individuals and organizations. I am struck by this simple and very clear statement. Later in the day, I speak about it positively (my first thought) to Carol. I point out the simplicity, clarity and commitment to service contained in four short lines. Having been involved in the process to create a quality mission statement for our business, I have great interest in any company that values the importance of what I call the core document.

A few days later, after some reflection, I look again at this mission statement, but with new thinking. It is short and simple, which is good. But, there is a problem – a big one: In their purpose, they decide that it is okay to lose money. Let me say this clearly – it is not okay to lose money! Companies may experience losses in their formation, or at junctures along the way. But, losing money is a place we should avoid visiting and it must never be a place of long-term residence. In the current Mission & Values document of Hackbarth Delivery Service (HDS), it states:

We achieve profits that are acceptable to our financial partners and sufficient for accelerated growth.

Profits at HDS are not only needed but expected. It is part of our values and mission. I am sure that this shipbuilding company had no desire to lose money. But, the reference of ‘losing money’ does not belong in a mission statement. If anything, the opposite declaration is needed. A lot of positive things happen when profits occur. Here are some of them:

Bonuses – In some companies, employees earn a bonus based on a percent of the profits. This is true at HDS.

Growth – Most growth requires capital for financing. Often, that capital comes out of available cash from sustained profits.

Survival – The number-one goal for any company is to exist tomorrow.

Cash Flow – The ability to pay bills timely is essential to achieving and maintaining the credit needed for day-to-day operations.

Notice that in the HDS mission statement, we have captured two of the vital reasons for profits: paying bills timely, and growth. It is not hard to persuade owners the need for profits. We have a personal benefit that applies to this goal. Employees, who are not owners, also should be part of any profit goal. It will impact them, including the security of their job.

The familiar definition of the word profit is “the excess of income over expenditure.” Another description is “an advantage or benefit derived from an activity.” The latter definition would certainly apply universally to all of us. We do things every day expecting a benefit (profit). We may exercise hoping to lose weight. We eat good foods expecting to profit with good health. We go to school or seminars with a desire to become smarter in our jobs.

We go to work with the anticipation of a paycheck and benefits. In fact, we have our own little profit center in our home. We want our income to exceed our expenses, thus creating a profit. We might be saving for a rainy day, retirement, or a special vacation.

We are working for that something extra, that margin in life that will provide an added benefit. In our own personal world, profit as defined as a benefit derived from what we do, is not just a good word. It is a necessary word! It is a positive term. It is vital to almost every important thing we do.

Profits are essential to non-profit organizations, too. The term used for excess funds at the end of a financial period may not be the same as a for-profit business. But, make no mistake, these organizations need something extra. Some of their goals mirror that of their profit cousins: survival, growth and paying bills timely.

I have had the pleasure of being involved in a non-profit organization in Mobile, called L’Arche. It is an international organization that provides a home for people with intellectual disabilities. For many years, I served on the finance committee. I was known by the members of this group for “The Question.” I always asked it at every meeting. If it was late in our discussions without hearing the question, someone would say, “Has Rob asked his question yet?” And that question was a simple one: “Can we pay our bills timely within the next 30 days.” I would ask follow-up questions, such as, “Have we delayed paying any invoice? Are we holding a check that has already been written?” Plain and simple, what I was doing was asking about the ‘cash flow health’ in our organization.

Fortunately for L’Arche, financial health is not an issue at this time. But, there was a period when fiscal matters were a concern. Not surprisingly, money issues are often a challenge in non-profit organizations.

You may be aware of churches, which have a non-profit status, that create a building fund so that money is available in the future for capital structure needs. Savings for major repairs is often a strategy. Any church that concentrates solely on paying their current bills, without creating something extra, may face a huge challenge one day. Most of us have seen examples where this has happened.

One common recommendation for non-profits is to have a minimum six-month emergency fund. Families also need this. Jobs and companies change and there is always a need for backup resources. Businesses likewise need a plan for the unexpected event.

Businesses, non-profit organizations and families need profits (something extra) to ensure their survival, to deliver benefits and provide for the long-term. To pay both the current bills and the emergency ones in the future, we must have something extra (profits).

In our lives, we want to always ‘build great ships’ – in the form of great companies, great families and great lives. We want to build great ships within the environment of great profits so that all of us may gain an advantage, a benefit.

We build great Ships!                      We build great lives!

Always at a profit!                            Always at an advantage!

Always with benefits!                      Always with extras!

Always great ships!                          Always great lives!

Profits, as I have defined today, is a positive proclamation that all of us can embrace. We all have a role in making sure that we build an advantage (profit, benefit) into all that we do.

How do you view profits? How can you help your company, family and non-profit to increase and build profits? Be sure to express your thoughts with others in the organizations where you serve. Everyone can and should be on the “profit committee.”

I wish for you a great life, filled with profits, advantages, benefits, and the little extras.