9 Steps to a Better Bottom Line

profit

How to Improve Your Bottom Line

In the last several years, businesses have faced smarter competitors, continual change, technological innovations, and uncertainty.

It seems more difficult than ever to both grow the top line of a business and the bottom line, too.

That’s the challenge that Dr. Dorriah Rogers, CEO of Paradyne Consulting Works, takes on.

From her work with some of the most complex projects and organizations, Dorriah has developed a 9 step program to grow net profit. After reading her new book Decide to Profit: 9 Steps to a Better Bottom Line, I asked her to share more about her research and experience.

 

“The man who removes a mountain begins by carrying away small stones.” –Chinese Proverb

 

Tell us more about the 9 steps and how you arrived at them.

The 9 steps are the result of many years of implementing various profit-focused solutions and systems across many different types of industries and companies.  At one point in my consulting career, a senior executive (almost, but not quite) jokingly asked me if I could develop an “Operations Manual” of all the tools I had at my disposal.  That was the genesis of the 9 Steps.  From there, I kept refining the steps, making sure they were interrelated, and asked for real-world feedback from my clients, until I had it down to a system as simple as I could make it.  I wanted to create a process that was not overly complicated to understand or use, and I wanted to create something that both managers making decisions and employees wanting to make an impact could readily implement to help their companies improve profitability.

 

“Whenever man comes up with a better mousetrap, nature immediately comes up with a better mouse.” –James Carswell

 

Identifying the system that needs improvement seems straightforward, but it isn’t as easy as it sounds. What if you can’t seem to identify which one is off course?

Agreed.  It is not simple to get started.  And that is why so many of my clients struggled.  They either focused on too many improvements or the wrong ones.  In many cases, most managers and employees inherently know where they need to start, or in what general area, and that is as good a point to begin with as any.  It may not be as tight a starting point as you might want, but the 9 Steps will help to define and clarify if it is the right place to focus your attention and resources as you progress.  Keep in mind that a “system improvement” could be as big as an entire corporate overhaul (like the Lego case study in the book) or as small as an internal vendor payment process.  The idea is to find those things that are impacting your ability to make money.  So the first place to start is to discuss internally which things are impacting your ability to generate profit.  Not revenue, but profit. 

Companies have a choice: keep doing what you’re doing and make incremental (or no) improvements to your bottom line, or tackle your best estimate of the system within your organization that could potentially have the biggest impact on profit.  You might start out with the wrong one, but the beauty of the 9 Steps is the iterative process built into it.  Along the way (and fairly soon) you will realize that the system you chose to improve might not be the right one because it is NOT positively impacting your financial goals, and the steps will prove that out for you through the ROI process.  At that point, you simply readjust, and the 9 Steps will guide you closer to those areas that will have the biggest impact.  So in short, start somewhere and the 9 Steps process will get you where you need to be.

 

“Creativity is thinking up new things. Innovation is doing new things.” –Theodore Levitt

 

Beware the Expert Loop

What is the expert loop and how does it often cause problems?

The expert loop was first coined by Alex “Sandy” Pentland in his November 2013 HBR article entitled “Beyond the Echo Chamber.”  In it, he posited that within organizations only a handful or individuals are viewed as the experts and the only ones who are capable of making important decisions.  I agree with his conclusions that, in fact, seeking information outside of this expert network is often much more valuable.  Time and time again I have seen the phenomenon of top executives sitting in rooms with the same small group of people as they rehash both problems and ideas in a tired, circular rhythm. The same ideas are beaten to death, and the same people are heard.  Even when new people are brought into the conversation, their ideas are often dismissed or even scoffed at as the experts re-establish their positions of authority at the top of the food chain. The problem this creates is twofold: a lack of true innovation and the stifling of a culture of continuous improvement.  While it is true that experts should (and do) have great ideas, it often requires a fresh perspective or a dissenting voice to shake things up and move the company in a new direction.  Some of the best ideas I have ever heard have come from the most unexpected voices.

 

9 Steps to Improving Your Bottom Line

  1. Identify the system that needs improvement.
  2. Put the right team together.
  3. Identify the goal.
  4. Observe the system.
  5. Identify bottlenecks within the system.
  6. Brainstorm.
  7. Select optimal solutions for improvement.
  8. Implement one change at a time.
  9. Sustain a culture of continuous improvement.

 

Unlock the Power of Brainstorming

Leadership Thought: Is Your Myopia Your Utopia?

myopic leadership
This is a guest post by Doug Thorpe. Doug is a motivational speaker and John Maxwell Coach who helps individuals discover new heights in their own leadership ability.

 

When it comes to leadership and management, nearsightedness or myopia is a common occurrence. What does that mean?

Since effective leadership is part art as much as part science, I see too many managers taking a nearsighted look at their role and responsibility. By this I mean we place more emphasis on the duties and responsibilities (the science) where policies and procedures govern and control the thinking. This happens while the more subtle aspects of leadership (the art) like communication and delegation suffer.

In your early years of management, you had a specific team with clearly defined duties to push widgets or turn cranks. Much of what gets done there is process or project oriented. Process is derived from principles and procedures. Get the process right over and over again, BAM! you’re a good manager. OK, hooray for you.

That kind of success starts to sink in, and you get swallowed up in a false sense of accomplishment. You figure if you keep doing that, you will keep getting bonuses and promotions. The nearsighted myopia creeps in.

You get so enthralled by the surety of your achievements as a manger, you never explore the more subtle art of becoming a leader. The success seems like Utopia. Why should you ever change?

 

“Where there is no vision, there is no hope.” -George Washington Carver

 

Legalism in Life

There are other kinds of myopic behaviors I’ve observed in life. People everywhere subscribe to some new teaching (think child rearing – Dr. Spock in the 50’s v. now, the Littles). Teaching spawned by doctrines such as these generate disciples who would rather argue you to death than entertain an alternate answer.

That is myopia at its worst. Locking in on a belief like this can become dogmatic to others. The comfort that comes from the engrained beliefs creates the Utopia effect. I call it legalism: pure science, no art.

 

Growth as a Leader

Leaders, or people wanting to be leaders, must embrace a mindset for growth. Whatever your natural capacity is to lead (and we all have some capacity), you can grow beyond that level.

As John Maxwell cites, there is a Law of the Lid. Some call it the Peter Principle. We all have maximum capacity beyond which we struggle. The fortunate truth is we also can grow beyond that capacity.

However, the first step in growth is knowing there is something more. Myopic vision will never allow that. If you stay fixated on a comfort zone, you cannot grow.

 

“If you change the way you look at things, the things you look at change.” -Wayne Dyer

 

The Key Question

How A Leader’s Personality Impacts the Ability to Win

built for growth

Built for Growth

Many business books are written on how to innovate, achieve faster growth, or beat the competition. I’ve not read many that focus on the personality of the leader. But the founder’s personality has a dramatic impact on all aspects of the company culture and its potential.

That’s the core focus of Chris Kuenne and John Danner’s new book, BUILT FOR GROWTH: How Builder Personality Shapes Your Business, Your Team, and Your Ability to Win.

If entrepreneurs understand their personalities, it will help them choose the right team to enhance their strengths and manage around their weaknesses.

I recently spoke with the authors about their fascinating research into personality in this context. John Danner is a senior fellow at the University of California Berkley’s Institute for Business Innovation. A faculty member, a business adviser, and an entrepreneur, he speaks widely on topics from innovation to strategy. Chris Kuenne is a member of Princeton University’s entrepreneurship faculty, a growth capital investor, an entrepreneur, and a speaker.

 

“To win in the twenty-first century, you must empower others.” -Jack Ma

 

3 Reasons Personality is Misunderstood

Personality is one of the least understood elements of entrepreneurial and business success. Why is that still the case after decades of study and research?

We think there might be three converging reasons. First, the business world often tends to overlook introspection and reflection in its bias for action and results, so the issue of who you are can get lost in the impatient focus on what you’ve done. The “do” trumps the “who.” But as any manager or leader knows, personality does matter . . . a lot; so that action-bias has left a void in our understanding.

Second, we love icons. Movies and the media naturally latch onto a compelling storyline, a fascinating individual, and retell that one person’s experience, character and personality. But icons can quickly become stereotypes, and those stereotypes reinforce the notion that you have to be an extraordinarily exceptional person to find success as an entrepreneur. That shorthand can substitute for a deeper understanding of what’s really at play here. In other words, every entrepreneur doesn’t have to be a Steve Jobs or Elon Musk to be successful; our research discovered there are four distinct personalities of successful entrepreneurs. And there are likely millions of individuals the world over who share those same personality patterns.

Third, although most people are intensely curious about who they are and how they’re wired, most personality assessments are ill-suited to the task of cracking the code of successful business building. Many address very broad issues, e.g., am I an extrovert or introvert, a Type A or Type B, etc. Or they’re designed to answer other questions in personal domains, like who might be a good match for me, what music might I like, etc.

Some broad-gauge tools can help people decide whether they might be cut out for entrepreneurship generally, e.g., are they comfortable with taking risks or working for themselves? But those resources don’t address the fundamental question: what are the key personality characteristics of the women and men who actually succeed in building lasting businesses of impressive scale? What makes those individuals tick, and am I like any of them?

And context is key here; people want to know about personalities in action in particular settings. That’s why we concentrated on examining personalities in the context of successful business ventures and used a patented Personality-ClusteringTM methodology that has proven its effectiveness in decoding specific customer behavior in hundreds of markets around the world.

But our research is just a first step in understanding the central mystery of the who of successful entrepreneurship. We invite others to build upon our findings as we refine our own work. After all, entrepreneurship is vital to economic growth and opportunity globally. We welcome others’ insights into this complicated and essential domain of human endeavor.

 

“Teams need captains, and vice versa-if you want to get things done.” -Mark Coopersmith

 

4 Types of Builder Personalities

Briefly walk through the four types of Builder personalities.

The Driver: Relentless, Commercially Focused, and Highly Confident – Drivers can’t help themselves. They have to become builders of business or social ventures of their own as a means of self-validation. Entrepreneurship is almost hardwired into their very identity. They are supremely confident individuals, fixated on their products, relentless in pursuing commercial success based on their uncanny anticipation of what markets and customers are looking for. Drivers – like Steve Jobs or Elon Musk – often don’t last long as employees in other people’s organizations. They eschew rules and bureaucracy, seeing them as tools to focus the average person, yet often confine the truly gifted, independent-thinking actor. These builders are willing to do whatever it takes to realize the commercial success inherent in what they believe is their unbounded potential, in fact their destiny.

Master the Boomerang Principle and Inspire Lifetime Loyalty

Inspire Loyalty

I remember when my grandfather retired many years ago. He had been at the same company for decades. My father, too, worked for one employer for the majority of his career before retiring.

Today, it’s not uncommon to change employers every few years. Millennials especially move around. After all, companies aren’t as loyal to employees as they once were, so it’s only natural that employees’ loyalties have also shifted.

What are the implications of these changes? What should companies do?

 

“Build a culture of value that consistently greens your own pastures.” -Lee Caraher

 

Lee Caraher has built several companies, and she’s an expert on Millennials. She argues that it’s important to create long-lasting relationships with your employees even after they leave. In today’s environment, you want them to be raving fans of the organization no matter where they turn up.

I love this philosophy. I followed up with Lee to ask her more about her experience and research into what she calls The Boomerang Principle.

Lee Caraher is the CEO of Double Forte, a national PR and social media firm, and the author of The Boomerang Principle: Inspire Lifetime Loyalty from Your Employees.

 

“Boomerangs are the drivers of sustainable business.” -Lee Caraher

 

How Expectations Have Shifted

What organizational traits do Millennials look for?

Practice Intelligent Restraint to Drive Your Growth

Pacing for Growth

Chances are that you’re driven. You have goals, and you’re actively working on them. When you get to work, you’re off and running.

I know this because most people reading this blog are here for success tips to become better leaders and more successful. If you were lazy and drifting without goals, you probably wouldn’t be visiting.

As you push through obstacles, you likely don’t think much about the word “restraint.” In fact, if you do, you may think that the only thing that matters is removing all restraints so you can get to your destination. Fast.

 

“Never let others define what success means for you.” -Alison Eyring

 

That’s why I was drawn to the work of Dr. Alison Eyring. Her book, Pacing for Growth: Why Intelligent Restraint Drives Long-Term Success, is about the balance between speed and restraint. I asked her to share some of these principles with us so we could learn from her research into what she calls “intelligent restraint.” Alison Eyring is the founder and CEO of Organisation Solutions, and she has advised some of the world’s most innovative companies on leadership and growth.

 

Solve Your Growth Challenge

How has competing in long-distance runs and triathlons impacted your approach to business?

Like all business leaders, I struggle to drive my business to perform today, as I also lead transformation for the future – all without damaging the business or my team. It’s so much easier to focus on just one of those things, but we have to do all three for long-term success.  My experience training for endurance races led me to discover a growth philosophy I call “Intelligent Restraint” that helps solve this growth challenge.

 

Can you tell us more about “Intelligent Restraint”?

Intelligent Restraint is a growth mindset that helps you build the right capabilities for growth at the right pace. Sometimes it means going slower, and other times it means going faster.

When you are training for an endurance race, you have to push yourself to go as far and as fast as you can but then no further so that you don’t get hurt or burned out.  In my book, I describe practical ways leaders can apply this growth mindset. For example, you can define and measure “maximum capacity” of the business and then create a plan to bridge the gap between current levels of performance and “maximum capacity.”

Another way leaders can put this way of thinking to work is by practicing what I call “Rules of Intelligent Restraint.” Like rules of restraint in endurance training, these rules help leaders drive growth in a way that conserves energy and can be sustained. My favorite rule is “routines beat strengths.”

 

“Routines beat strengths.” -Alison Eyring

 

Alison's 8 Insights from Endurance Training

  1. Always train for the right race.
  2. Don’t let any mountain defeat you.
  3. Be good enough when good is enough.
  4. Find many ways to maintain your own energy.
  5. Don’t spend your life doing only what you do well.
  6. Never let others define what success means for you.
  7. Be courageous and be humble; persevere and be willing to stop.
  8. Never be intimidated by anyone who looks stronger and faster than you.

 

Train for the Right Race

How do leaders find the right balance between the sprint and the marathon?

You can’t sprint and run long distance unless you’ve trained properly. A midfielder in soccer, for example, will sprint the entire game AND also run several miles. They’ve trained for this. On the other hand, if you ask a world class sprinter to run a marathon tomorrow, they might possibly complete a half marathon but they’ll be in tremendous pain.

As leaders, we need to train our business and our people for the right race. We all want to succeed over the long-term as a business, but there is seldom a long-term unless we can deliver in the short-term and have enough energy to keep going. Leaders who can practice the rules of Intelligent Restraint and manage energy strategically can achieve this.

 

“Focus overrules vision.” -Alison Eyring

 

Focus Overrules Vision