Transform the Corporate Infrastructure to Increase Profits.
In order to succeed in a corporate, start up or in local or central government, it is now critical to transform the corporate infrastructure to increase profits. Don’t let this barrier exist anymore. Today there still exists an enormous gap in how some companies in the top 250 FTSE and AIM top 100 skimp on basic infrastructure which has a direct impact to the bottom line. I have witnessed first-hand (incredible life lessons, I have no regrets by the way) where even the appointment of Bear Grylls will not bridge that continental ‘safari’ gap across the ravine on the trip wire.
Why do I conclude this? I have seen some very poor business cases that end up only massaging the egos of company directors rather than really focusing on the successful performance of the business. Consumers are much smarter than the brands and corporates of 2013/14 but so many board executives still forget this basic concept once in the boardroom. Hiding behind spreadsheets and loud unfounded executives now challenge any real chance of a comprehensive digital transformation.
So many board meetings end up being obsessed with the introduction of cost cutting from either a sales promotional initiative, staff reduction, operational efficiencies when actually what’s really happening is that they are only reducing the product value or service or even worse putting the quality assurance at risk of complete failure.
Is it any wonder then that when change is forced without proper consideration or consultation that key staff exit (with the best tacit knowledge available in some cases) and profits ultimately wain. In my opinion, there is no need for the corporate infrastructure to be the barrier to long term profits but to be honest therein lies the real inception of the problem. After a horrific recession, UK businesses have put huge pressure on departments and people to produce much, much more at less cost and in less time, and in some ways I don’t blame them. Everyone, including me REALLY wants out of the fiscal mess that we have been navigating through for the longest time.
The problem I have is really with the attitude towards the term ‘cost’. Ignorance and lack of corporate intelligence is the direct cost of lower profit, staff turnover, poor morale, silo culture, and ineffective leadership. Let’s start at the very top. Yes it all starts with MR. CEO or executive chairman who is normally an utter inspiration and provides that Red Bull energy to the business that should drive the most compelling results, culture and ROI…but let’s be honest does your CEO really set a SMART strategy that completely engages staff, markets and customers alike for the next 12 months?
The reason I ask is that you can build a 5 year vision statement right now but not so much a tactical 24 month plan that becomes a game changer. A strong corporate engine needs to start with an intelligent approach to infrastructure, that is dynamic, prolific and has a total understanding that key staff drive profit through their brilliant ideas and operational capabilities. Infrastructure does not need to be expensive or indeed live in a glass building, 30+ floors up looking at a skyline.
Let’s make transformation possible and this is how it can be achieved. In order to encourage sustainable profits I want to propose some alignment in order to produce the next fiscal and business corporate road map.
- Audit and survey the internal functions independently (and then action on the tacit knowledge into the corporate plans. Don’t persecute staff, listen, act and see profits rise)
- Produce a comprehensive commercial plan that gains the buy-in from internal stakeholders (employees), the investor relations (including the bank) and effectively targets the existing and new customers to produce sustainable profits, globally
- Review sales and marketing tools so that selling becomes an organic business value to the core operations, not a promotional tool that is discounting every month just to meet sales targets and business KPI’s. There is no need for a price war but there is every need for a value proposition war. This is what separates sustainable profit from risk of failure.
- Every key executive should have a very clear sight of financial reporting and operational costs in order to help the business be much more accountable, no matter what market. Regular analysis of historic and current sales trends is critical to better inform financial forecasting and its own ROI. Businesses must use the setting of a budget as a long term ‘investment into business performance’ rather than an ‘investment into cuts’.
My advice for the next 12 months is to stop obsessing over sales as much as 2014 and start to look at the current year and ask brave questions that have been set in the plan. Are you really on the right path? If so, how do you know? What evidence have you to support the business cases that you have in place? Blame really only goes one way, so don’t be pointing fingers, suggest commercial solutions that really transform the corporate infrastructure to produce longer term profits, intelligently.
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