How Businesses Survive and thrive….. or don’t
The Four Levers of the Apocalypse
A Script for a Team Manager when briefing Team Leaders, about to brief their Team members, as to why profit is vital, and how we can all contribute to helping the business to survive and thrive.
The key to make your message more easily understood for the audience may well be the story telling style.
Imagine yourself sitting at your desk at the end of another day; a day that seems to pass with all the energy, noise and speed of a hurricane. To your amazement we all seem to be here, alive and well, and a warm glow of not only survival, but success. Another day when we were the best we could be.
- Every day we must make a margin to reinvest and ensure the survival of our business.
- Every month we must have the cash to pay wages and suppliers.
- And pay interest on the money that people have lent us to run our business.
- And let us remind ourselves that many companies are owned by shareholders who want a regular dividend payment on the money they paid to buy the shares.
- And that most public companies’ major shareholders are pension funds, like the one you and I expect to get our pension payments from in the future.
- Dividends, loan interest, property, wages and suppliers, in fact all business costs, can only be paid from Profits.
Profit is a consequence of only 4 things:-
- The fee/price we charge.
- The volume of work we generate.
- The cost associated with doing that volume of work.
- And our productivity; did we achieve the individual or team outputs today that our bid/costing was based on; or did it take longer. We produced 4 widgets when our selling price is based on us doing 5.
I would therefore ask, as you reflect at the end of the day about the performance of our team, and you as an individual; to use this frame work.
The price we charge
- What did we do as team today that convinced the customer that we are great value for the price we charge?
- If one of us rang them as soon as we had finished; would they say their expectations were exceeded. When one of your team speaks on the phone, writes a letter or E mail, they are speaking on behalf of all the employees of this organisation; who depend on your team member to defend or improve our brand reputation.
- How could we help the team member make it easier for the customer to keep buying from us; to keep us all in work?
- Are the internal communications from your team to the rest of the business the best they can be?
The volume of work we generate
- What has the team done today to think about a new offering that we can sell to our customers?
- Is there a service/product we can add to our process that will add value/ save money for our clients?
- New offerings that our competitors currently do not have are less price sensitive in the first year, we must keep a continuous flow of new offerings if we are to maintain our margin/customer satisfaction level across the whole portfolio of products and services.
- What did we do as team today to defend our volume? What did we do today to make it easy for our clients to give us more work without concerning themselves that our quality would fall because we could not cope?
- What did we do twice today because we didn’t get it right first time?
- What did I do that a team member should have done, but they still haven’t mastered it?
- What did I do about the sulking team member whose performance is causing everybody to slow down their output? Slowed down because ‘Sids’ colleagues are spending more time at the coffee machine talking about when is something going to be done about “sulky Sid”
- Have I got someone I am paying £10 an hour doing work that could be just as easily done by someone on £8? Because then I have released a skilled resource to sell at a higher margin
- All these things and more, mean our cost to do work may be more than the customers will pay.
- Are we doing ‘our thing’ the best way? Have you asked your team members how we could do it better?
- With inflation of our organisation’s purchases running at 2 to 3%, we must have a 2 to 3% reduction in unit costs just to stand still. The biggest driver of this is productivity improvement.
- If we have 100 operational minutes to carry out all the tasks associated with a product/service today; next year we must strive to do it in 97 minutes. What did your team do today that will result in us taking the 3 minutes out of the process?
- Blaming “Too much” work for a drop in output is not going to encourage the customers to maintain current volumes, let alone send us more. Every team, and business unit must have a surge plan to cope with rapid volume increase. Customer’s view of our abilities is much coloured by how we respond to fluctuations in work load.
- We must be excellent at managing surge if we are not only going to defend our volumes but increase them.
These 4 levers of the Apocalypse sit at every desk; and are in everybody’s hands every day.
Our ability to survive and thrive is determined by these four levers. Price: Cost: Volume: Productivity.
Your key role is to ensure that that they were used every day.
…of Team Managers script for Team Leader Briefing.