The businesses that I see with the greatest ability to grow profits share a certain set of characteristics. They may be in different markets and industries but their organisational approaches and ways of working are remarkably similar, and include these 12 characteristics:
- Crystal clear objectives. High-profit businesses know what’s important. They have clear goals and have made the trade-offs required to pursue them. They’ve determined what they’re not going to do as much as what they are going to do.
- Play to their strengths. The essence of strategy. They add to their capabilities but they never try to go where they can’t compete effectively.
- Clear accountabilities. High-profit organsiations don’t have people tripping up over themselves. Each individual knows what results they’re accountable for.
- Hold their managers to account. They don’t just plan, but also manage performance effectively and deal up-front with poor performing teams and individuals.
- Get close to their customers. Starting with the leadership team, they devote serious time to meeting, observing and talking with their customers.
- Outsource non-critical activities. They don’t try to do everything, but focus on what drives their competitive advantage and outsource other activities.
- Partner, Partner, Partner. They integrate suppliers, customers, and others into their operations and business development programmes.
- Focus on cross-business relationships. They know that your ability to get anything done is directly proportional to the size and quality of your relationships with your colleagues and stakeholders.
- No fear of failure. They are willing to take prudent risks in pursuit of growth and improvement.
- Persistence. They remain fixed on the vision, even though they’re flexible on the journey.
- Organisational simplicity. Complexity is the enemy of pace and therefore the enemy of growth. High-Profit Organisations keep their ways of working as simple as possible, and always err on the side of simplicity.
- Quickly get behind winners. If they see something’s working they refocus to make the most of it. They are willing to change their plans rapidly to back the winners.
How many of these characteristics does your organisation possess?
© Stuart Cross 2011. All rights reserved.