This week, I was lucky enough to be among the 100 or so members of the marketing department to receive an impromptu pep talk from a finance executive. We have these meetings once a month that are kind of like Deca lunch meeting, but without the lunch. This time, a VP from finance had been called in to explain next year's budget to us. The budget is already a sore spot for anyone that has had anything to do with it. Because of downward pressure on gross margins, achieving explosive profit growth will require big jumps in revenue, combined with no new spending on anything. This is not a business strategy - it is a financial goal that is palatable to shareholders. In spite of the comprehensive austerity campaign, Finance guy says that our business is considered the growth engine of the company. Accounting for only about 2% of revenues, we make up nearly 1/4 of the company's value, he says, because of the profitability of our business.

In a moment of spontenaety which the VP must have later regretted, he used the slide showing our balance sheet to launch into a discussion of Corporate's new definition of profit - "economic profit". Instead of just saying a business unit's profit = stuff sold minus how much it cost to make the stuff, the will now include a charge for financing assets. Think of it this way (my example, not his). You got a guy who has a taxi, and guy with a rickshaw. Guy with the taxi takes in $100 in a day, and the rickshaw dude gets $50. Let's say operating expenses are $25 for the taxi, and $10 for the rickshaw. Taxi guy makes more money, right? But the taxi costs a lot more than the rickshaw, so if the taxi guy has to pay $50 to finance his taxi, and rickshaw dude only has to pay $5 to finance his rickshaw, rickshaw guy make $35, and taxi guy make $25. Plus, rickshaw guy gets a nice lower body workout.

Finance guy makes broad generalizations about the markets that we operate in, saying that surely with all the stuff we do, we can just expand into adjacent spaces, and find all these new opportunities that will generate plenty of "economic profit". "You guys are in marketing! You're the creative people! ("creative" used as a pejorative) You can come up with all the ideas we need in order to generate more economic profit!". Wow - why didn't I think of that? There are just so many new opportunities lying around that require no people, no investment, and no assets. In fact, we receive engraved invitations from our competitors on a daily basis asking us to come and exploit these opportunities at their expense.

I am somewhat nervous as I listen to him, because I know that I have to ask him a question. "How can we be the growth engine of the company, and yet be financed like a rickshaw brigade?" (I didn't use "rickshaw brigade"). Well, says Finance guy, finance people have studied spreadsheets for many years now, and have discovered that it's possible to sell lots more stuff without hiring any more people. This is called "leveraging SG&A". Believe it or not, I'm done complaining.

The US beat Mexico today in what I'm sure was an extremely entertaining Gold Cup final. I'll watch it tomorrow morning when I work out. I was sure the US would lose this time, but I was happy to be wrong.

I read something from Nig a while back about the pews being too far from the wall, gifting an escape route to his kids. Thankfully, this is something our new church got right. I know this because every week, we place Kai on the inside between us and the wall, and every week the first thing he does is attempt to wedge his head through the gap between the pew and the wall. Now if our church would only retrofit the pews with chicken wire underneath, we would be set.

Below are some pics of the daddy/daughter campout. Props to anyone who knows what the heck most of these are pictures of.