The 7-steps to profit

These principles are essential to help you tighten up your business model

As the world continues to come to terms with the fallout from these unprecedented times, we are facing lots of uncertainty. Many of us are learning and adapting as we go and are coping really well, despite the global economy being in jeopardy.

But this is no time for complacency. Consumer demand will be challenged for the foreseeable future, encouraging consumers to be more discerning about their spend. That means that businesses need to be mindful of protecting their market share and margin in a new world. However, when under pressure, businesses often become very operationsfocused with heads down all the time. We are all in danger of knee-jerk reactions, leading to mistakes, poor practices and dangerous norms.

To prevent this, I’d like to bring you back to the basic principles that are essential to help you tighten up your business model. This will give you the best chance of success.

The 7-steps to profit

1. BRAND DNA: FIND YOUR NORTH STAR

You already know this as vision and mission statements. When a company has not yet considered its real purpose, some team members might believe it wants to be the best in the industry, for example. Others might have polar opposite views and might think the business doesn’t care about the customer. To not think about it and articulate it clearly to your people is a missed opportunity. Its absence creates ambiguity and confusion.

2. REFRESH YOUR CULTURE

Culture is a set of behaviours and processes that determine how things get done. If you have been to a Disney theme park, you’ll know how much they care about their own people and customers. You can almost feel it in the air as you experience all it has to offer. That’s driven by its culture.

DEMAND WILL BE CHALLENGED FOR THE FORESEEABLE FUTURE, ENCOURAGING CONSUMERS TO BE MORE DISCERNING ABOUT THEIR SPEND

3. PLOT YOUR STRATEGY

Budgets are not plans; they are a set of numbers with no reference to how you will achieve them. Your strategy however, is your big picture route to achieving key milestones in the pursuit of your north star.

4. DEVELOP YOUR TEAM

One organisation that I know of has a structure that is no longer fit for purpose. Tentacles have grown over the years as the business expanded. It has a team of people that has been with the business for many years. Many of them have assumed responsibility and others have just stood back. Consequently, decision-making is ambiguous and accountability is poor.

5. CONNECT WITH YOUR CUSTOMER

Even before Covid-19, we were experiencing shifts in consumer behaviour. From constantly changing demographics, to high levels of user-acceptance of technology, to dietary preferences and lifestyle changes.

Therefore, customer awareness and connectivity has to be high on your agenda.

6. BUILD YOUR 3-LEGGED STOOL

All of the previous steps will feed into helping you shape the value proposition that customers will judge you on. It’s made up of three legs of a stool, your ‘product mix’, your ‘people’ and your ‘place/ route to market’.

For example, Louis Vuitton confidently defines itself as a five-star brand, therefore its product mix and store standards reflect that. In contrast, Carrefour is a proud volume retailer but they obviously don’t sell Gucci or Chanel.

7. EXECUTION: DO AND REVIEW

This is where you spend 99.9 per cent of your time, doing the day-job and cranking the machine.

However, this is where the problems with the system can kick in, such as out-of-stocks, conflict and tension. While there will always be unforeseen and unplanned events that can disrupt the flow of a normal day, even with a great plan, the likelihood is that they will be reduced significantly with regular reviews of steps 1-6.

In times of crisis, it’s really difficult to thoroughly plan ahead, so perhaps you might incorporate flexibility in here too.

THE LAST WORD

The 7-Steps to Profit is a triedand-tested model that has been around in various forms for hundreds of years. It is being used by the great and the good already, so it will work for you too, regardless of your size.

Check back in here over the next few months and I’ll go into more details with each step.