A Conversation That Changed Everything
“Are you seriously telling me our top-selling product is costing us money?” the CFO of a mid-size industrial company in Monterrey asked. He wasn’t shocked, but he was clearly unsettled. Our customer-profitability analysis had just revealed that 27% of his revenue came from products with negative margins. What really got to him was not the numbers themselves, but what they meant. He now had to make tough decisions, have difficult conversations, and question beliefs that had been in place for years.
After two decades working with executive teams across Latin America, I’ve learned that the biggest problems for companies often come from what they think they know for certain, not from what they don’t know. Many of these myths aren’t completely wrong; they’re just unclear enough to cause trouble. Let’s look at 10 of the most common myths and see how to replace them with clear, practical steps.
Guiding Questions
- Which invisible assumptions are quietly draining profitability?
- How can leaders challenge long-held myths without creating resistance?
- What kind of mindset fosters precise, adaptive decision-making?
- How do we build cultures that reward operational discipline over vague alignment?
1. Not All Revenue Is Good Revenue
The idea that “revenue is good” sounds harmless at first, but it can be risky. In most organizations I’ve worked with, 20 to 30 percent of customers generate nearly all the profit, while 30 to 40 percent actually reduce value. This issue gets even worse when salespeople are rewarded only for gross revenue.
Try this: Visualize profitability by customer, product, and channel. One client created a heatmap by segment and used it in monthly steering meetings. It changed both how they sold and who they sold to. Selling without margin is just a costly illusion.
2. The Customer Is Not Always Right (But Their Needs Are)
“Customer-centric” can sometimes become “customer-submissive.” I’ve seen companies say yes to every demand, like custom SKUs, last-minute shipping, and zero penalties, without realizing they are damaging the very relationships they want to protect.
Rethink this: Being truly customer-centric means helping clients make smarter, more profitable decisions. Sometimes that means saying, “No, but here’s why.”
3. Sales and Operations Can’t Work in Silos
At a logistics firm in Lima, the COO realized his team was optimizing routes and warehouse space without knowing which customers were strategic. It saved pennies and lost millions.
Bridge the gap: Sales and operations need to speak the same language, focusing on margin per customer, service tiers, and resource allocation. Profitability is not affected by internal divisions.
4. Treating All Customers the Same Creates Inefficiency
Fair doesn’t mean equal. Serving all customers the same way wastes resources and diminishes service quality for your most valuable accounts. A mid-sized tech company in Santiago found that 40% of its lowest-margin customers consumed 60% of its support hours.
Use this: Segment clients by profitability and strategic value using a 2x2 matrix. Then tailor service levels. The result? Higher margins, fewer complaints.
□ REFLECTION
Is your most profitable segment funding the chaos elsewhere in your business?
5. Supply Chain Integration Isn’t Always a Smart Bet
Some clients are not ready for, or worth, the investment in deep integration. A flashy dashboard shared across companies may seem impressive, but it quickly loses value if one side stops updating it.
Instead: Prioritize integration based on two axes: strategic importance and willingness to innovate. High-high? Go deep. Low-low? Keep it simple. Integration is a privilege, not a default.
6. Doing Your Job Well Doesn’t Guarantee Company Success
I once met a procurement head proud of securing an 8% discount on a part we later found shouldn’t be ordered in the first place. Meanwhile, sales was closing deals with unprofitable customers.
□ QUESTION
Are your KPIs measuring actual contribution—or just effort?
Lesson: Functional excellence without shared accountability leads to systemic inefficiency. Everyone owns the margin.
7. Promotion Isn’t About Doing More—It’s About Doing Differently
Too often, leaders promote strong performers and then micromanage them. The newly promoted managers get stuck redoing their old jobs instead of scaling through others.
Fix this: Each promotion should mean stepping back, not getting more involved in day-to-day tasks. Directors should focus on coaching, and VPs should focus on setting the vision. If no one is planning ahead, your strategy will fall behind.
8. Business Cases Don’t Work at the Edge of Innovation
In innovation, if you wait for certainty, you are already too late. Investment committees prefer clear ROI projections, but many high-return ideas begin in a messy way.
Workaround: Use a “learn-decide-scale” loop. Fund small experiments, gather evidence, then scale quickly. One client tried this with a new pricing model and reached breakeven in four months, even though the idea was first rejected for not having a traditional business case.
9. You Don’t Need a Crisis to Drive Change
Waiting for a downturn to act is like waiting for a fire to buy an extinguisher. The best firms lead change from ambition, not fear.
Approach: Set a “pre-crisis mandate.” Define what is at risk, prototype future moves, and set up “base camps” for step-by-step transformation. Focus on direction, not drama.
10. What Works TodaySaying “If it ain’t broke…” is a sign of falling behind. Leading companies improve what works before it fails. That is how they stay relevant.g. That’s how they stay relevant.
Shift: Move from “optimize the current” to “design the next.” That’s the mindset of sustainable market leaders.
Beyond the Myths: Think Precisely, Act with Discipline
These myths are not dangerous because they are false, but because they seem true. That kind of unclear thinking is where profit disappears, waste grows, and teams lose focus.
Precision leadership isn’t about playing it safe. It’s about asking better questions, challenging surface logic, and acting with operational coherence.
The organizations that succeed are the ones focused on clarity and willing to challenge what everyone assumes to be true.
Bibliography
- Deloitte & IMA. Unlocking Cost and Profitability Management Insights. Deloitte Center for Controllership & Institute of Management Accountants, 2023.
- IBM Institute for Business Value. From AI Projects to Profits: The AI ROI Reset. IBM, June 2025.
- IBM Institute for Business Value. 5 Trends for 2025. IBM, December 2024.
- Accenture Research. “Artificial Intelligence Has Potential to Increase Corporate Profitability in 16 Industries by an Average of 38% by 2035.” Accenture, June 21, 2017.
- Institute of Management Accountants. IMA Management Accounting Competency Framework. IMA, 2022.