Chances are, you have some great ideas on how to increase your company’s profitability. But it takes more than ideas to make progress; it takes specific goals and a plan that will give your ideas “legs.”
To that end, here are 12 steps to laying out a profit enhancement road map for the months ahead:
1. Identify critical profit projects you want to work on and determine the target results for each one. For example, you may want to increase sales by 10% or reduce order-processing time by one day.
2. List the benefits and risks of each project. Upsides might include greater revenue for the company, stronger skills for management, more efficient processes for staff or better value for customers. Downsides could be a heavy upfront investment, jeopardizing cash flow, or a steep learning curve that may prevent ultimate success. Proceed only if the benefits outweigh the risks.
3. Assign a “Profit Champion” on your staff for each project. This person will be responsible for heading up and monitoring the effort.
4. Predict outside roadblocks. Identify obstacles and determine how you will deal with them. These might involve other departments, management, customers or suppliers.
5. Anticipate why your Profit Champions might go off track. When employees have to start doing things differently, they may resist or commit errors. For example, let’s say the sales people have to meet one night a week to get the extra training needed. Are they open to doing so?
6. Determine how results will be measured and establish employee rewards. Creating long- and short-term rewards will help get and keep workers on board and motivate them to reach your profit goals.
7. List resources required to accomplish the project. Resources might include information, field experts, time with executive management, and even intangibles such as support dealing with other employees. Make sure your Profit Champions have access to the necessary resources and are empowered to use them.
8. Break down the profit project down into subtasks. List the activities your Profit Champions and their teams will need to perform to accomplish the goal.
9. Assign due dates for each subtask. Keep deadlines reasonable.
10. Make a “to do” list for each subtask. Start with the earliest due date.
11. Keep in contact with your Profit Champions. Hold them to deadlines and reporting requirements. Coach your Profit Champions to overcome obstacles, experiment with new ideas if necessary and succeed. During regularly held meetings, ask them whether they have any additional profit-project ideas inspired by the work they’re doing.
12. Finish the project. A project that goes on forever is unlikely to create real and lasting results. Help your Profit Champions lead their teams to completion and, thereafter, measure the results of the project to see whether it’s living up to promise.
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