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Profit Beyond Measure presents a compelling challenge to traditional cost management and profit maximization strategies. In this insightful work, H. Thomas Johnson and Anders Bröms argue that businesses can avoid the waste caused by excessive operating costs in the short term and by market instability in the long term. Their solution lies in changing the way companies approach work and organizing it differently to secure more sustainable profitability.

The book offers a fascinating case study of two highly profitable companies—Toyota and Swedish truck manufacturer Scania—showing how they have rejected conventional, mechanistic management practices that often lead to waste. Instead, Johnson and Bröms highlight how both companies leverage a revolutionary concept they term managing by means (MBM). This approach is in stark contrast to traditional methods of managing by results, which are typically driven by rigid accounting targets. Toyota and Scania’s production systems, they explain, operate under the guiding principles of self-organization, interdependence, and diversity—key elements that are essential for sustaining life systems.

Through detailed exploration, the book illustrates how Toyota and Scania achieve remarkable cost advantages by adopting MBM, where design, production, and profitability analysis are done to customer order. This holistic approach ensures that the companies not only remain lean and profitable but also mitigate long-term earnings instability and reduce short-term operating costs. By following principles that mimic the behavior of living systems, these companies create more resilient and adaptive business models.

The authors also highlight the impressive financial stability and longevity that Scania has maintained for over six decades, despite intense competition. Toyota, on the other hand, has emerged as a dominant global player with a market value that rivals the combined worth of the "Big Three" U.S. automakers. Johnson and Bröms argue that any company can achieve similar success and longevity by applying the principles laid out in Profit Beyond Measure.

Strengths:

• Innovative Approach: The concept of managing by means offers a fresh, life-systems-based perspective on organizational management that contrasts sharply with traditional result-driven approaches.
• Real-World Case Studies: The book’s detailed case studies of Toyota and Scania provide valuable lessons on how companies can build long-term profitability and stability by embracing flexibility and self-organization.
• Practical Insights: The tools and strategies for implementing MBM are practical and can be applied to businesses across industries, providing concrete ways to reduce waste and improve organizational effectiveness.

Weaknesses:

• Complex Concepts: While the ideas presented are compelling, some readers may find the concept of managing by means a bit abstract or difficult to implement without a deeper understanding of systems thinking.
• Limited Scope: The focus on Toyota and Scania is valuable but could limit the applicability of the insights to companies outside the automotive and manufacturing sectors.

Conclusion:

Profit Beyond Measure offers a revolutionary framework for managing businesses that challenges the traditional wisdom of cost-cutting and result-driven management. Through the lens of Toyota and Scania’s success, Johnson and Bröms make a persuasive case for a more sustainable, flexible, and efficient approach to corporate governance. The book is a must-read for business leaders and managers seeking innovative ways to enhance profitability, long-term stability, and reduce waste.