Business leaders often encounter the daunting task of improving their organization’s profitability. Many may not know where to start.
If that’s you, check out the following five steps an organization can focus on to improve its bottom line:
1. Establish a Culture Employees Love
According to McKinsey, companies with cultures ranking in the top quartile of the Organizational Health Index post a 60% higher return to shareholders and 200% higher than those in the bottom quartile.
There’s no easy formula for creating a great culture, and I certainly can’t do this subject justice in a 500-word blog. The foundation starts with valuing each individual, giving them a voice in everyday matters, and creating an environment where employees love to come to work. Then, build from there.
2. Establish Goals Everyone Can Buy Into
When business leaders establish top-level goals and all levels of the organization establish their goals in support of them, that’s an excellent place to start. However, the employees have to buy into their plans. Executives must cast a vision of where the organization is heading and the employee’s role in getting there. If employees don’t connect to the big picture, productivity can suffer, and the organization’s profitability could follow suit.
3. Emphasize the Use of Key Performance Indicators (KPIs)
Successful organizations use KPIs to measure progress towards their goals, Even if you’re currently using KPIs, you want them to tie directly to your most critical operations so you can stay on top of the progress towards your goals. By monitoring your KPIs, you’ll be alerted when measures are trending downward, so you can intervene more quickly with solutions.
4. Streamline Your Processes
Organizations with streamlined business processes experience a reduction in costs, increased revenue, and improved profitability. Take Merchants InsuranceGroup. After streamlining their Portfolio Management area operations, they improved on-time project delivery to 80% and achieved a 758% revenue growth in the first two months.
For your operations, focus first on improving your processes that are the most significant cost drivers and have the most time-consuming tasks. By doing so, you’re likely to experience more significant gains on a shorter timetable.
5. Automate Your Processes
When organizations automate their business processes, it’s a powerful tool for reducing costs, improving productivity, and increasing profitability. It’s not uncommon for productivity to increase by over 300% with workflow automation over previous processes.
A great plan is to automate recently improved processes. By doing so, you can achieve even more significant cost reductions and productivity increases than through process improvement alone.
Speaking about automating processes, Michael Cantu and I are excited about our upcoming book launch, No-Nonsense Digital Transformation. We discuss how digitizing your operations can increase productivity and ultimately profitability. Not only that, we talk extensively about building exceptional teams and creating great cultures, so it isn’t just for digital transformation fans.
Are you interested in learning more? Then click here to get started!