December is our Take Action issue – the “T” in the Growth and ProfiT editorial calendar that defines each month of the year. I usually include a client Case Study in every newsletter, however, in this edition, I want you to be your own Case Study, by answering business questions and looking back over the previous year and identifying your profit and growth wins and losses, so that you can Take Action in the most impactful areas next year.
This link to the Profit and Growth Wheel of Business is a good place to start your assessment, then read and answer the dozen very specific business questions below about success in core areas of your business. If you fail to plan, you plan to fail, so use your answers to plan for success in 2018. Note that I have specific programs if you need some support. I only have 3 places left for the first 6 months of 2018 to work with organizations looking for proven solutions to their most challenging areas, so please reach out if you want to accelerate your results instead of reinventing the wheel (so to speak!).
12 Business Questions for Success
- Do you still love your business and can’t think of anything else you’d rather spend your life doing?
Return on Heartbeats is a powerful concept. The problem is unless your answer is wholeheartedly a yes, it’s time to find a way to put the profit, passion, and growth back in your business so that you love it again.
- Did your customer retention increase or decrease in the past year?
Do you even measure customer retention, other than anecdotally when a big customer is lost? Most companies don’t because often they’re challenged to identify which customers to keep, which to let go of, and how to implement specific retention or exit strategies.
- Were your revenues more or less profitable than they were last year?
Sure, you know if revenues were higher or lower… but 40% of the companies who grow their revenues actually decrease their profits. The challenge you have is to identify what constitutes “good” revenue vs sales that will cost you more than they’re worth. Do you have a way to do that?
- Does your quality help you or hinder you when it comes to competitive advantage?
If you’re doing rework (even before the customer ever sees the product) or dealing with quality-related returns and issues, then quality is not part of your competitive advantage. In fact, the problem that needs your attention is not just quality – it’s how to get the hidden costs of all that fixing out of your business because its quietly costing you a fortune.
- Is your profitability per employee leading or lagging your overall industry and key competitors?
Most of the leaders I speak with are convinced that margins are relatively fixed in their industry. But when they look through the lens of profitability per employee, they’re shocked to find that every industry has clear winners and losers on this KPI… and that often the winners are 4x, 6x, even 10x ahead of the losers. The opportunity to set the bar higher and achieve it is pretty powerful if you’re not already the lead horse.
- When was the last time your customers were excited by something innovative that you did?
When did you last hear a wow from one of your customers? When did you last experience a wow as a customer? They’re so rare that they create huge competitive advantages when they happen. The challenge you’ll need to overcome is how to leverage the multitude of ways to create that wow if you don’t have an R&D pipeline full of goodies just ready to go.
- What needs to happen next year to increase the financial freedom you want in your business?
I frequently speak in front of business owners running multi-million dollar businesses, and more often than not, they confess that they’re STILL financing the business themselves on occasion, whether through personal lines of credit or personal guarantees on their assets. Whether you’re funding your business or not, if you’re not happy with how well you’re being compensated for your long hours and risk, your problem is actually embedded in conventional P&L thinking which puts expenses first, and profits last. Your accounting practices won’t change – but your mindset and practices need to.
- On a scale of 1-10 where 10 is tops, how well would you rank yourself as the employer of choice in your geography or industry?
If you have empty seats that don’t attract good people, you’ll never be able to inflate the flat your Wheel of Business, tire because doing it all yourself is not an option. Today’s employees have high expectations about being involved and making a difference, so your greatest opportunity and challenge is to create a culture where you attract the best.
- What, specifically, are you doing to make sure you stay ahead of the curve and don’t get blindsided by new competitors or industry shifts?
Whoever would have thought that the lowly telephone would replace high-end camera manufacturers not with decades, but within a few short years? Every industry and every value chain is being disrupted – yours too, whether you’ve seen it coming or not. Even with great market intel, the problem you still have is to not just react but to be agile enough to leapfrog the threats to your survival. ‘We’ve always done it this way’ hasn’t cut it for a long time.
- If you were asked whether all of your employees demonstrate the quality of decisions and actions that you would like them to, would you answer yes or no?
When employees understand their role in success and know how to help win the game, they behave like owners. The challenge you have is that conventional job descriptions do a lousy job of playing to employees strengths and helping them connect the dots between how their 7.5 hours every day makes a difference to the overall goals – if they even understand what their goals are. You need to show them how to win.
- What percentage of time would you say your employees spend on well-intentioned but non-core busy work, vs being fully focused on their role in moving your strategic agenda forward?
When I poll C-level business leaders, most say they spend a minimum of 2 hours on email every day, and that their people spend at least twice that with much of the rest of their time fighting fires or in meetings. In fact, its estimated that the typical employee spends less than 28 minutes per day of productive time, and less than 10% of that truly focused on work of strategic value. Your opportunity is to have them spend as much time per week focused on important work as they spend on email per day. Imagine what you could accomplish… the problem is how to get there.
- If you did not achieve all of your strategic goals in the past year, what will need to be different in the next year in order to change that?
Most executives overestimate what they can achieve in one year and underestimate what they can achieve in 5. If you’re in the habit of carrying over too many strategic To Do’s every year, it’s the culmination of each of the flat tire areas above. Lack of time. Lack of focus. Lack of people. Lack of funding. Lack of clarity. Lack of cash flow. The problem you still have is that knowing where there are flat spots and doing something about them are two different things. The vast majority of leaders will stay stuck in the status quo. 10% will get beyond good intentions and create a plan. Only 1% will actually take action and see results. Are you one of those leaders who take action?
The EBITDA Tuneup™, ProfitU™, and GrowU™ provide precise roadmaps for these profit and growth challenges designed to be implemented in about 90 minutes once a week. Would something as simple as that give you a fully inflated tire and substantially higher Return on Heartbeats? Let’s talk.
Wishing you and yours, health and happiness through the holidays, with greater ROP (Return on People) and greater ROH (Return on Heartbeats) from your business next year.
#1 Bestselling Author, International Speaker, and Accelerator Anne C. Graham is on a mission to help 5 million business leaders and their teams double their profit per employee – or more – in less than one year, in less time per week than they’re spending on email per day. Her bestselling book Profit in Plain Sight includes the 5-step proactive P.R.O.F.I+T Plan to do it. Connect with Anne on Twitter and LinkedIn.