Saturday, May 10, 2014

Profits not keeping pace with revenue?

To remain competitive, organizations must boost operational efficiency wherever possible.  Common sense tells us that lack of operating efficiently and effectively leads to erosion of profitability and potentially the demise of a business.  Does an increase in your organization’s profit margin continue to elude you?

Some reasons for lack of increased profits:

·        People are working hard to gain sales, but company inefficiencies prevent increased profitability.  Is the focus on revenue or profitability?  Are you paying attention to the sales margin or just taking any work?  Insist that every job makes a profit.  

·        People don't share data.  Is there enough demand for the product or service at a price that will produce a profit for the company?  Will the expansion into additional markets be profitable?  Make it a point to regularly talk about what customers are saying, what data has been collected, and what the numbers are telling you.  

·        The wrong people are in the decision making process.  Is your management team dysfunctional – does it lack focus, vision, planning, and high standards?  Are the right people in place to make necessary changes?  

·       Old habits remain which prevent growth.  People are reluctant to switch over to new systems. Businesses stagnate when people are slow to change.  Are people holding profits hostage due to stubbornness, or being risk or conflict averse? 
Poor change management during the introduction of IT systems can cause chaos.  Whenever software is replaced it's disruptive to workers, which results in lowered productivity.  By adding a poorly functioning IT system to the mix, you have grounds for anarchy!  Minimize or eliminate such disruptions by carefully determining short- and long-term business objectives and then carefully develop technology solutions to those objectives. Don’t forget, organizations that regularly monitor efficiencies and have a business plan in place are the ones who outperform competition. 

The Pro/Axios Diagnostic Approach allows you to detect and correct these issues and more.  Contact us for further analysis.  If your people aren't working together, you're losing profit.