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Sep 9, 2019 | Uncategorized
A Tale of Two P&L’s
My 14-year-old daughter and I were overlooking the river in Savannah, Georgia watching a massive 1,000 foot long, 85,000 ton container ship steam into port. As it was greeted by two tugboats we chatted a bit about the cargo, which led to the topic of trade and business.
The Captain of the container ship has a big responsibility. 2,000 containers carrying millions of dollars in goods. If it were a P&L, it would be a big one. But:
- He’s got a big ocean to sail on between ports. Once in blue water the ship is on autopilot, the routes and port schedule are set. A few course corrections may be needed along the way, but they’re small.
- His 15 – 20 person crew generally know their jobs and they maintain the ship well. Their work is often routine.
- When the ship enters and leaves the harbor he turns complete control of his ship over to the Harbor Pilot. When the ship is deeper into the harbor and near the docks, it’s the tugboats that gently push it to the pier.
- It can be a comfortable, high level existence.
Comparatively, the Captain of the harbor tugboat has a much smaller P&L. Maybe 50 feet in length, 80 tons of displacement and a small crew. However:
- The captain is constantly correcting to shifting tides and currents. He is never on autopilot.
- He’ll personally guide multiple ships into and out of port each day, which means he’s actively engaged and working hard.
- Each of the ships he guides into port is different. The work is continually changing.
- Leadership is essential for success; if one person fails, disaster can occur.
- It’s a high profile, high risk job.
- The tugboat Captain gets paid more than the container ship Captain, by a significant sum
Previous to our trip to Savannah I presented an opportunity to a GM from a large aerospace company to become President of a much smaller, private equity owned operation. He declined.
“I have a $400M P&L now. That one just seems small” was his reason.
I like big companies. They hire very smart people to lead big P&L’s. Most operations are on course and manned by highly skilled workers who do their jobs well, and with a certain routine. The individual P&L leaders may make a 2 or 3 or 5 degree course correction, but drastic change is rarely called for, or needed. Pay is typically limited to a structured salary band, some bonus and, maybe some equity if they’re lucky. It’s a good job.
On the flip side, a lot of executives come to me with stating “I want to be at a place where I can be more entrepreneurial” with a follow-up statement of “do you know anyone at Lockheed or Boeing?”
For those of you who fit into this category, Boeing and Lockheed are terrific companies. But they’re also 85,000-ton container ships. Power is limited as is the ability to make big change.
If you want to be more entrepreneurial, you gotta think more “tug boat.” Don’t be afraid to look small. Quite often it’s where the big (and exciting) opportunities lie.
Craig Picken is an Executive Recruiter who focuses on senior leaders in the Aviation and Aerospace industries