We’ve been having a lot of discussions internally lately about business. It’s an exciting time, and there are obviously many different ways to grow the business. When a business goes through these discussions and the exercises that naturally come with it, it’s easy to lose sight of the forest through the trees. There are so many details, and so many choices of different buttons to push and levers to move that it can easily be overwhelming.
In these times, when it feels like there are too many choices, I opt to simplify. Get back to the basics. I will tend to ask the question “What’s the point?” When you take this approach, it helps move our thinking to the critical path. At its essence, every business is trying to maximize profits. This doesn’t preclude you from having other nobler goals, but at the end of the day, one of the key responsibilities of any business is to maximize profits. And, there are really only two ways to do that: increase revenues or decrease costs. It’s just math.
Now, if it was that simple, every business would be ridiculously profitable. Clearly it’s not that easy. To help with this, we’ve recently started thinking about our business as a living organism with three moving parts:
When you think about business or your organization from this perspective, it helps clarify what you need to do or what you can do to move the needle in the two things that impact profits (Revenue and Costs). Because, the fact is that if you fix something in one of these three areas, that may help but it’s an incomplete picture. Say you’re looking at the Order Fulfillment process and believe that you need to implement new procedures or systems in the warehouse to streamline the process and cut costs. This could work, but if you neglect the customer management aspect, then it could work at the expense of disappointing or losing customers. Or, you might implement new systems or hire new people to help with prospect and customer management, but if you’re not generating enough demand for your products and services, then your new systems and people won’t have enough prospects and customers to serve.
One of the great things about the world we live in today is that the availability of technology to help businesses is greater than ever. There are powerful systems available for demand generation, customer and lead management, and order fulfillment. These are systems that didn’t exist, in some cases, even 10 years ago, and now, not only do they exist, but they talk to each other. These are tools that can help in ways that were unimaginable in the past.
As you ponder your business, and if you’re going through a planning process, I encourage you to think about systems and technology from this holistic, big picture perspective. Evaluate your systems especially from the standpoint of demand generation, lead and customer management, and order fulfillment. How can system changes in each of these areas help move the needle in terms of profitability?
Everything is connected. Business is a living organism, and if you look at it differently, you risk fixing a limb and then watching as the head falls off. And, I think we’d all agree that having a head is important. No matter who or what you are.