Swimming in the Moat: The Business of Projects
Asked about his success as an investor, the Sage of Omaha once replied that he never invested in a business he could not understand. The point Warren Buffett was making was that in order to make money from a company, you had to understand--really understand--how the company made money. Yet many of us do that every day by turning up for work and doing our job without really understanding how the companies we work for make money.
The common understanding of commerce we all share is that companies and organizations compete with one another to create products and services that they sell in the marketplace. That’s how they make money, by selling stuff. Whether it’s electronic consumables, professional services, pharmaceuticals, buildings and bridges…whatever it is we do in our jobs, the goal is to make money from selling these at a profit. At a profit is an obvious but necessary qualification. (For non-profit organizations, the equivalent is generating surplus revenue.)
Although many project managers can knowledgeably describe what their companies do, understanding the business that they work in really equates to understanding how an organization makes a profit. For any project manager, knowing the business means knowing how their projects contribute to achieving that goal. This is important because the decisions and trade-offs made on a project need to be
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