Lurking underneath even the biggest, fattest bottom line is what every marketer hates to face or even think about – the losers. You may even lull yourself into mistakenly thinking they aren’t there. But, they are. Sneaky little cracks in even the best company’s armor.
See how each of these six typical losers could be dragging down your results and then take action to eradicate them. Revisit this list each year as a discipline.
1. The money-sucking hard asset. This can be as big as a division, or perhaps a single bulk plant or store, or as mundane as a worn-out truck. It’s the one you keep wishing will make money, it’s just about to turn the corner…but…it doesn’t. Someday, you say, I’ll be glad I have it. But how much cash, time and attention will it drain from you and your team while you are waiting? Lease it, sell it, but don’t keep watching it lose money.
Maybe it’s just the truck that keeps breaking down causing frustrated customers, dispatch, drivers and customer service. Bite the bullet and get a new one. When you add up the personnel hours and drama, new looks far less costly.
2. The underperforming but loyal employee. You know the one – the person that has been there for years and years; used to be a star; loves your company. But, who are you kidding because they don’t love it enough to learn a new technology or change how they do things. After all, they’ve done it their way forever and it’s worked all these years, so why change? You love them, they love you.
So a little wake up call. It’s time for you to define that love using clear, expected, and agreed upon results. It means the “heart to heart” talk. And, if you find in that talk they are not willing to be defined by results, you must help move them to their next career.
Non-performers are like an anchor on a ship wanting to sail. Sure if the wind is strong enough, you can drag the anchor along. But it weighs down the whole ship, making the rest of the crew’s job more difficult. And it’s highly likely the same crew is secretly losing respect for you because of your inaction.
The solution is to jointly create measurable job goals and expectations. Your non-performer may surprise you by rising to the task or they may choose the door. If they don’t hit the mark, you must show them the door, humanely of course. No one promised that being CEO isn’t a tough job. But you don’t bless them by allowing them to wallow in sameness when the world is changing.
3. The used-to-be-profitable big customer. How did a high profit, great customer end up where they are now? It happens slowly, usually so gradually you aren’t sure how it happened. That wonderful customer just simply isn’t so wonderful anymore. The margin has disappeared. Maybe they gripe. Or demand. Or shop around and leverage. No matter how great your service, it’s just not good enough. You and your team may be killing yourselves to keep them happy, but somehow they are never fully happy.
As CEO, it’s time for you to step in and have the hard conversation with the customer. You may actually carve out an agreement and make some money again. Or, you may agree that it’s best you go your separate ways and suggest or even help them find a new supplier. (Think of the shock! No one does that!)
But pretending you aren’t losing money, or wishing that they would change won’t solve your problem. You can motivate yourself to action by listing the true cost of continuing to serve this customer as you are now. Don’t forget personnel time, or other customers perturbed when you prioritize delivery schedules. Then, as you look at your costs, think about shifting that red ink to a competitor you don’t like. You might even get a little smile as you dial for the visit appointment.
4. Your biggest personal time waster. I don’t care what wonderful time management system you are using, there is still that one thing you are doing that you shouldn’t. It’s a big waste of your time that could be spent on far greater yielding activities. Whether it’s as mundane as email, internet surfing, or something that seems important like jumping into an employee situation, knowing deep down they should be educated to competently solve their own problems, it’s your personal loser.
Think through your typical day. Then, write a list of what you do that you shouldn’t. It’s likely you’ll have a decent size list if you are honest with yourself. From that list, choose the biggest loser you want to rid yourself of through deletion or delegation. One friend of mine calls this his STOP DOING list and committed this year to eliminate one each month. Can you imagine how much more time you’d have for strategy and steering your ship by getting rid of 10 mundane time wasters?
5. One spreadsheet outside your software. In today’s marketplace, you must be super efficient to survive. Most home offices use only a fraction of their software’s capabilities and worse create spreadsheets to work outside the system. Ask your team for a list of spreadsheets they use regularly in their job as well as how much time they spend on each (monthly, weekly, daily – however they choose to report is fine).
Then, call your software vendor, share the lists, and ask them what they could easily automate without additional charges. You’ll be amazed at how much time you will save, and errors! Once your team is shown they save time, and automation is accurate, they’ll be on board to rid themselves of efficiency-robbing spreadsheets.
6. The Unneeded Report. Once you tackle the spreadsheets, move on to asking your team what reports they run and where they go. Then check in with who gets them to see if they even read or use them.
A very successful private investor shared with me that no matter how complex his companies are, he wants to see only a one page report that has everything he needs for major strategic decisions and guidance. If this guy can do it running multiple companies with billions in sales, you can do it.
Also watch for situations where you or your team must run a report to get a single piece of vital data. In today’s real time, data rich systems, running reports should become non-existent.
Think of the profit improvement you could have just six months from now if you tackled one of these six losers each month. Want to improve faster? Tackle two per month and be rocking it by the end of a single quarter!
If an expert, outside eye to help spot hidden opportunities and be support for your team to execute on great ideas might appeal to you, visit our www.MeridianMpower.com webpage. Meridian can provide fabulous resources for less than most companies invest in an entry level employee per month.
May eliminating your six losers put you on the path to more profit!