You Can’t Save Your Way to Prosperity…

This message is important as we move into what will be an enormously challenging year for business.

Despite the gloomy predictions all businesses need to continually look to ramp up their revenues and constantly look for growth. There is no such thing as standing still or ‘holding your own’ in business.

Too many executives now focus 100% on the bottom line. They zero in on costs as the culprit when profits fall. This phenomenon has spawned a host of cutbacks over recent years (with more to come this year no doubt) in both headcount and budgets. First on the ‘chopping block’ are usually marketing and training – this is folly.

That said, in the short-term, these draconian methods seem to work. Costs go down and profits rise – but trouble is on the horizon. After all the ‘right sizing’ of the team and slashing of budgets the survivors of the cuts realise that fewer people must achieve much more with much less. Is it any wonder that Managers get burned out? They live in a world of ‘permanent pressure’ careering from one crisis to the next, with little control over the companies they are paid to manage.

In many situations cost cutting is prudent. However, this approach has become a ‘crutch’ for many executives who see cuts as their first course of action, rather than as the last resort.

Managers need to look upwards within the business to see what is truly delivering the cash flow that sustains every business – top line revenue. Revenue GROWTH is the true measure of business vitality. It reflects a company’s competency to acquire, satisfy and grow its customer/ client base. As our headline reads and as a famous business guru once said ‘‘you can’t save your way to prosperity’’

Management teams that focus too much on cost containment and not enough on revenue growth often exhibit the following symptoms:

• Static or declining revenues.
• Loss in market share.
• Personal feelings of lost control, constantly reacting to the marketplace – a permanent white-water situation.
• Disappointing results from ‘big bet’ new initiatives on growth – for example a new product launch.
• Employees who are confused about the strategy

If any of these symptoms sound like your company you are not alone!!

This is the real problem. Many executives do not know how to create an effective plan, mobilise the team and make real revenue GROWTH a reality.

Planning of any kind is hard work – whether it is the annual business plan or the long-range strategic plan. The most elemental job of management ‘to plan the work and work the plan’ really is not so elemental. Because planning is typically done once a year, most executives are nor proficient and it always feels above and beyond one’s normal job.

It is easy to understand why planning of any kind is a major stress for executives. No one has ever taught them to do it. It is just something they are expected to do. But a business can only be as good as its growth strategy. Most experienced managers would also agree that ‘bad systems beat good people every time’. Yet, the fact is that their planning system is failing and beating them.

• Budgets on steroids – the plan here is little more than an explosion of budget details and financials with virtually no thought given to the actual strategy required to achieve the numbers.
• “Inside-out” management – management’s pre-occupation with internal operational matters results in little or no focus on what’s going on in the outside marketplace – including competitors, intermediary customers and the end-user.
• Quick and dirty “outside-in” analysis – a rudimentary list, or SWOT (strengths, weaknesses, opportunities, threats) analysis, is performed by listing problems but no defining an action plan.
• Confidential ‘for our eyes only’ – management keeps where we are going and how we will get there at top secret level. Mid-level managers or those who perform the work – haven’t a clue.
• 3-Inch shelf-ware – these plans are both exhaustive in scope and exhausting to read with too much data and not enough insight/ useful information. Their sheer BULK discourages use and defies comprehension – thus the plan becomes dusty shelf-ware.

Thousands of companies have lost the battle ‘to grow or die’. They question how to think differently. The thing is that if real change is to happen executives must SEE differently.

Our success in helping businesses grow in really tough markets comes from our ability to help Managing Directors/ Owners see things they would not have without our help.