A coffee this week with an old friend, the CEO of a technology company, reminded me of how having an Achilles heel and a “critical number” can transform your business.
For many years the team at this particular technology company knew they weren’t terribly good at managing staff utilisation. It was the business’s Achilles heel; its vulnerable spot. But because there were other more pressing issues, and to be honest because business was buoyant, they muddled through.
About a year ago the management team finally decided to address the issue of staff utilisation and after a concerted focus by the whole company the effort paid off. A 100% increase in net profit. Needless to say they wished they had focused on their Achilles heel a decade earlier.
Many businesses have an Achilles heel; an area of weakness largely hidden by the strength of the rest of the business. These flaws can represent a great untapped opportunity because in many cases a relatively small improvement in the health of the Achilles heel can yield a significant increase in profit.
So my suggestion this week is that you spend the next 100 days focusing intensely on your Achilles heel. The key to success here is not so much in the mechanics of how you are going to fix your Achilles heel but rather in deciding you are going to do something about it and in harnessing the momentum of your entire organization. Here are some thoughts on how.
Identify your Achilles heel. Many businesses have more than one vulnerable spot, but because you can really only work on one at a time start with the area where you believe you can make the biggest impact.
Create a measure, a key performance indicator, for this area. Of course ideally you would already have one but let’s be honest if you if you were already tracking this area like a hawk then it probably wouldn’t be such an issue. Let’s call this measure your critical number.
Put in place a system to tell you the magnitude of your critical number every day. If this is a mammoth task then a quick and dirty daily measure backed up by an accurate weekly critical number will do.
Set a goal for what you want your critical number to be in 100 days.
Involve every employee in the mission to change the critical number. Launch it at your quarterly whole-of-company meeting by explaining the issue and the goal and asking everyone to participate in their own way, however small.
Keep the critical number top of everyone’s mind. Sharing success stories is a good way to do this, but make sure you focus on the small wins as well as the big ones. You want everyone to feel that their contribution matters. And sometimes the big wins come in unexpected places. A company whose critical number was daily bankings discovered that the receptionist was stockpiling cheques so that she could make just one boring trip to the bank a week instead of five!
Share progress visually. Employees often get more excited by progress towards a goal than by absolute numbers. I find an over-large barometer stuck prominently on the wall seems to do the trick.
Make achieving the 100-day critical number a delightful prospect for everyone, not just the management team. Instigate rewards; they don’t need to be big but they do need to be fun.
In all likelihood after 100 days you will have made good progress but still have a way to go. I suggest you continue by setting another critical number goal for the next 100 days, and so on and so forth until you are satisfied. Then of course you can work on your next Achilles heel.
Julia Bickerstaff’s expertise is in helping businesses grow profitably. She runs two businesses: Butterfly Coaching, a small advisory firm with a unique approach to assisting SMEs with profitable growth; and The Business Bakery, which helps kitchen table tycoons build their best businesses. Julia is the author of “How to Bake a Business” and was previously a partner at Deloitte. She is a chartered accountant and has a degree in economics from The London School of Economics (London University).
To read more Profitable Growth expert advice, click here.
Smart Company is a sister publication to The Mandarin, catering to Australia’s entrepreneurs, small and medium business owners and business managers.
