Volatility is here to stay! Even though we continue to drudge along in the lackluster recovery, excitement remains – earthquakes, nuclear disasters, global conflicts in Libya, oil prices skyrocketing again, etc. Thus, if there is anything business leaders know about the current economy, it is that dramatic change will continue – and they must find a way to succeed in this environment. Yet amidst all the chaos, it’s tough to find a clear path to success.
I often hear from my clients and contacts, “I know I need to improve my business, department or personal career; however, I have no idea where to start”. So, what should we do? 1) Do a quick review of key benchmarks. 2) Ask experts. 3) Consider profit drivers.
- Do a Quick Review of Key Benchmarks: One excellent way to get ideas to answer the question of what to do is to do a quick review of key benchmarks. What are the critical metrics of your competitors? What are the latest trends in the industry? Find the critical few and compare your company, department or personal performance to the benchmarks.
So, the next question becomes, “How?” There are many approaches – begin with Google. It’s fast, easily-accessible and can provide valuable information. If you need to dig further, find a public company which is most like your company. (Thanks, Cheryle, for sharing this tip with me!). Pull the annual report. If you need further information, pull the top 3 annual reports most like your company. Do you see trends? You can also utilize a benchmarking/ research database or service. And, if you are well-funded and need additional information, request an industry or market survey.
Once you have this information, do not just blindly follow the patterns? Think about how what you’ve learned relates to your company and your competitive distinctions. How do you stack up? Can you focus on a strength in a key area?
- Ask Experts: Do not feel you need to have all the information yourself. Not only can you leverage experience and expertise so that you can avoid pitfalls and leap over learning curves but you also can leverage “1+1+1 = 64” – in essence, the power of brainstorming.
If you are an executive or business owner, begin by asking questions of your peers and employees. You’ll be amazed as to the quality of their ideas and understanding of what will make a difference for your business. If you are a department head or employee, ask your leader. I’ve never seen an executive refuse a request to provide mentoring; in fact, it could yield substantially more than you thought. Ask peers and employees as well. They are a fountain of knowledge.
Ask customers and suppliers. Who else knows your business better than your partners? Also, they are likely partnering with others in your industry and/or your competitors. Find out what will make a difference.
Last but not least, ask experts. Go to industry association meetings. Join forums related to your functional expertise. Bring in consultants who are focused on tangible improvement. Don’t fall into the industry expertise trap. You are surrounded by industry experts. Instead, find out about best practices across industries.
There could be a huge improvement opportunity you’ll overlook if you don’t look at what can be applied to your industry and/or environment. In my experience, I’ve utilized the same people, process and systems expertise to assist clients across multiple industries and countries without fail. I find the 80/20 to be identical, and so I figure out what the 20% distinction/ nuance is and tweak accordingly.
- Consider profit drivers: Last but not least, don’t forget your profit drivers. What are they? Who is your most valuable customer? Why? First and foremost, do they know they are appreciated? Are you providing them with exceptional service? Or are your efforts going to the nagging, high volume but low profit / no profit customer(s)?
Can you expand business with your profitable customers? Cross-sell? What is your largest cost driver? Is your organization focused on your most significant cost element? Or, are you following the crowd and only concerned with labor cost (regardless of its priority)? How can you focus your team to what matters? Or, if you want to improve your personal performance, how do you re-focus on what will have the largest impact on your career?
By thinking through your profit drivers, you’re likely to identify opportunities. At a minimum, you should determine what NOT to do. Why are you throwing money out the window on a non-essential?
Those companies and individuals who remain focused on dramatically improving performance in those key areas which will have the greatest impact on their success will leapfrog the competition. Will you be one of them?