Profitability is limited more by a lack of imagination and determination than anything else.
Breakthrough performance is made visible in models that measure the impact of changes in performance – increase this by 5%, reduce that by 3%, stop spending on this, and invest in that – you will be surprised at how the future of your BU will look.
And then you just need to instill the discipline in your team to deliver the changes.
Businesses with higher than average profits have done so because they have created a base of loyal customers willing to pay a premium for high quality products and services and have been able to maintain a lower overall cost base than their competitors.
We emphasize the importance of striving for higher than average profits because this is going to:
– Make additional growth funding easier to acquire.
– Enable you to compete more effectively by creating pricing flexibility.
– Make it easier to attract better employees by having a more attractive package.
– Accelerate the rate of investing in the business to pursue your strategy.
All pretty good reasons for wanting to reach for a higher profitability-bar than your competitors.