Most businesses try to grow profits, but a very few really try to maximize profits. That’s hard for me to accept, after having taught students that businesses maximize profits. But truly, most companies never try to find the maximum possible level of profits–if they can increase profits from last year, that’s good enough.
MGM Grand seems to be different. There’s a great article in Business 2.0 magazine about Gamal Aziz, CEO of the casino company, and his makeover of MGM Grand. He tore out several successful restaurants and retail facilities to make room for new operations that would generate higher profits. It’s not too hard to close a money-losing operation, but to close a successful restaurant because you think there an even more successful possibility–that takes guts.
Read the article, think about your own business.