How Does Your Business Make Money?

Don’t laugh.
I find that many key employees, often including managers of functions, really don’t understand the whole business and what it takes both to make money and what the requirements are to make a profit. Your entire senior team needs to understand the components of the ‘profit chain,’ how it works and where the opportunities are for improvement. And a good understanding of this means a strong working knowledge of the key processes within your organization that drive value for customers.
When members of the senior team are pointing fingers at and blaming each other, it’s usually the case that they do not understand the profit chain. When functional groups and especially support groups are off doing their own thing, there’s a clear disconnect in their understanding about how they contribute to making money.
Be clear about how profits are made and what key processes and supports to line organizations are. Make sure each functional manager understands their role in driving profits and can articulate that to their people. And get them all aligned with and sharply-focused on the business strategy.
This is an important function of the top leader and a key element of getting everyone On the Same Page.
Copyright 2017 Bob Legge
Bob Legge has an unmatched ability to help clients achieve competitive advantage, leaving competitors in their dust. He has worked with companies across industries and geographies to align critical elements, dominate their markets, and achieve dramatic results, such as 600% revenue increase in three years. Personally, he enjoys sailing where both his strategic abilities and tactical skills help him see interesting places while having a fabulous time with friends and family. .
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