Focus is a huge problem for any CEO in the business world today. With so many demands on their time and their energy, how does a business owner determine what are the right things to focus on at the right time?
As a business grows, the rules begin to change. The business owner can't grow the company any longer by simply doing more of the same thing. Business owners are constantly balancing a myriad of issues. In today's business climate, tough by everyone's standards, focusing on the areas of your business that improve sales, drive profits and protect cash and capital are crucial.
However, the other area of focus that each leader must address is how their leadership style is matching up with the demands of your business. Here are four areas that a leader should be addressing that will help improve revenues and profits.
1. Roll out 3-4 new revenue generators that diversify your sales engine and allow you to create multiple streams of revenue.
2. Evaluate your company's profit design to improve the allocation of your company's resources and clarify the underlying profit architecture.
3. Explode your beliefs about your current leadership style and how minor tweaks in it could add 5% to 9% to your bottom line.
4. Identify and then rivet your company's focus on only 3 to 5 profit drivers.
Utilize Wide Range of Sales Generators
Most leaders understand that to grow your business you need to: grow your customer base, increase transaction value and/or increase transaction frequency. Have you renewed your commitment to these three areas lately?
Where can you:
-- Deliver higher-than-expected levels of service?
-- Increase the sales skill levels of your staff?
-- Make irresistible offers?
-- Develop a unique selling proposition?
Evaluate Your Company's Profit Design
Most companies understand the need for a business plan. Few begin with a profit design. Twelve specific components make up a company's profit design:
1. Value exchange
2. Customer intelligence
3. Scope
4. Strategic control
5. Knowledge management
6. Strategic allies
7. Culture
8. Organizational structure
9. Research and Development
10. Capital intensity
11. Business development
12. Operational systems
When you begin to understand your company's profit design, you begin to limit risk and improve performance. Profit design questions everything you know about your business and forces you to think about:
-- What is your company really good at?
-- The expertise it takes to sell your service or product
-- What the customer magnet is that is built into those products and services
-- How employees access important information
-- Your company's primary personality culture
-- Your organizational capacity
Adapt Your Leadership Style
Companies change. You, as the leader, must change also. By understanding the specific needs of your company as it grows, you can adjust your leadership style to stay ahead of that growth curve. As a start up, companies demand a leader who can make things happen, who can create the vision and excite a group of people to follow that vision.
However, a company with 50 employees requires a leader with a coaching style, someone who is able to encourage employees to solve problems on their own. A dominant CEO in a company of this size can disenfranchise the organization, creating a company that is CEO-centric, not a good formula for growth.
Identify Your Company's Profit Drivers
Only 12% of all firms researched in a recent study were able to unequivocally say what their key drivers of profitability were. It all gets down to the intensity of focus. Successful company's have a laser focus. Unsuccessful companies are scattered.
To identify and then focus on these key drivers, you need to understand what drives the success of the organization, communicate that understanding to internal stakeholders and know when and how to focus the organization in the right direction.
Examples of profit drivers include: customer purchases, new product releases, customer retention, customer acquisition and strategic alliance development. Notice that not one of these are financial controls? They can and should be, but if that's the only profit driver you are focused on, you are probably not covering all your bases.
If you've ever felt overwhelmed, unsure or frustrated about your business, you're normal. Take control of those feelings by identifying and maintaining a rock-solid focus on these four critical aspects of your business.
-- Review and refresh your sales generators each quarter
-- Evaluate your profit design
-- Adapt your leadership style to each phase of your company's growth
-- Identify and focus on your 3 to 5 profit drivers
Laurie Taylor is a speaker, trainer and a business growth specialist. She works with business owners with fewer than 500 employees and speaks to business audiences all over the country on a unique model called the 7 Stages of Entrepreneurial Growth. Visit her website at http://www.igniteyourbiz.com
No comments:
Post a Comment