This is the fourth of four installments of goal setting ideas for companies that want to do something different this year. I’ve focused primarily on culture-related topics like accountability and toxicity in the previous three. This week I want to give you a simpler challenge. This year, go for incremental improvements in your business.
First, a caveat. This isn’t for everyone. Many businesses are at points where significant improvements or finaicial results are mandatory. But for many companies, business is moving along well. Goals have been met. If anything, you’ve become a little satisfied with how things are going and you might even consider yourself complacent.
For these organizations, I’d like to challenge you to look for incremental improvements. We’re not talking about massive numbers here. Let’s just look at making some small changes. Why? Well let’s start with the story of the Red Paperclip.
The Red Paperclip
Have you heard this story? It’s the true adventures of a Canadian blogger named Kyle MacDonald. He started with a simple, worthless object, a red paperclip. He bartered his red paperclip for a fish-shaped pen. He then traded the pen for a doorknob and the doorknob for a Coleman camp stove. Eventually, he traded his way up to a house!!
How can that be? You can read all of his exploits on his website or Wikipedia. But by carefully moving up to something bigger and better, he magnified the value of the red paperclip all the way to a house in Saskatcheuwan.
So what is the message for us in business? We need to embrace the idea that small incremental improvements can lead to great results! By finding small ways to make improvements in our performance, we can incrementally work are way to impressive results.
What are some examples that can apply to your business?
- Provide incrementally more services that improve the customer experience and will lead to larger business or repeat opportunities
- Find small incidental expenses that are eating away at your profits.
- Negotiate better pricing with key suppliers. Even a single point discount could give you a significant advantage over competitors.
- Provide sales incentives for your sales team to increase revenue or profits by just 1% next month.
1% per month
One percent per month doesn’t sound like much, does it? It also doesn’t sound like it would make much of a difference. 1%? I have clients tell me that I am wasting my time talking about such small numbers.
Now tell me this, what is 1% each month for 12 months? That’s easy. That equals 12%. Now if I told you we could increase sales by 12% would you be happy? Probably so.
Now let’s do a little math. If you increase 1% this month, and then increase your new revenue by 1% the following month, you have actually increased by slightly more than 2%. We all understand this. It’s the idea of compounding. (Like compounding interest, but in this case we actually like it). So if you use compounding, 1% a month leads to an increase of almost 13% in a year.
But how???
So the next question is, “How?”. That’s where people like me come in. We love bringing an outside perspective to help you look at your revenue programs, processes and overall team effectiveness.
I like to look at these four categories:
- Clarity – Do you have clear goals, objectives, processes, etc. Can everyone on your team explain what you do, why you do it and how it’s done? If not, then you may have issues with people being “on the same page” and may be leaving money on the table.
- Effectiveness – Are you working at your optimum capacity. Do you have the right people in the right seats? Are you holding people accountable and are people not wasting their time?
- Growth – Are you positioned for growth? Is your marketing plan effectiveness? Do your sales people have the right processes and tools? Are your sales people good salespeople?
- Leadership – Are you grooming the leaders of tomorrow? Do your managers act like leaders (coaches) or do the order their teams around? Ideally, our teams are autonomous and the leader/coaches are simply making sure they are enabled to get their work done.
These four steps, Clarity, Effectiveness, Growth & Leadership serve as an effective model of driving improvement in your organization.
Let’s Get Started
Call me today at 502-724-0430, or email me at jjennings@focalpointcoaching.com. Or go ahead and book time on my calendar using https://calendly.com/johnkjennings. We can chat on the phone for 30 minutes and get started on a plan that fits you.