Commitment isn't as popular today as instant success. But without commitment, short-term success isn’t guaranteed, and without commitment, long-term success is impossible.
To accomplish the strategic direction for your company while building value in your organization there must be a consistent focus on the “shared vision” and an agreement on the mission of your company. Commitment helps produce the focus necessary to generate the resources and time to accomplish goals. Continually communicating to your employees, vendors, clients and shareholders that your management team is committed to accomplishing the corporate goals creates energy, enthusiasm and a spirit of teamwork organized around measurable results. To create and sustain long-term profitability for your company, focus your organization on the "10 Commitments to Profitability."
1. Craft visionary strategies. Every organization has to have a road map to know where they are going and how they plan to get there. When conducting your strategic planning make sure you focus on the short-term but plan for the long-term. Too many companies focus solely on managing the efforts of the short-term revenue goals and they tend to lose their focus on their long-term targets. Strategies are created for the long-term (5- 10 years) and your business plans are implemented for the short-term (1- 3 years).
2. Adhere to Core Values. Every organization should have well defined core values which serve as their guiding light. These values should be woven into every aspect of your organization and all company policies, procedures, and programs should reflect them. Continually communicating these values with your employees, your customers, vendors, and consultants will help make sure everyone is committed to ethical business practices. Core values are the foundation for your organization and should be integrated into every business strategy.
3. Build a Strong Reputation – You company’s reputation is your most valuable asset and fortunately you have control of what you create. Reputations are dynamic and everyone in your organization is responsible for maintaining it to the standards that have been defined by your core values. One bad incident can destroy years of good will with your customers and your employees. On average if a person has a bad experience with a company they will tell 10 people and with today’s technology of blogs and message boards that bad experience can reach millions of people in just minutes. The most profitable companies have the highest percentage of repeat customers and those loyal customers are cultivated through a strong reputation.
4. Focus the Spirit of Competition. We all face competition and if managed properly competition is an excellent motivator for your organization. The key is to use your competition to drive excellence in your own organization. It is always more profitable to focus on your organization’s strengths, products, differentiators, market share, branding, industry position, etc. than trying to react to your competitors strategies or initiatives. Work with your customers to define what they want from your organization, what they value, and what they perceive you could do to improve – and leave your competition to keep up with the standards and services your organization has created.
5. Integrate Quality at every level. There never has been and there never will be a respectable business model that justifies compromising quality to reduce costs. There are a myriad of companies who have sacrificed the quality of their products and services to improve their short-term profitability, only to lose valuable and often irreplaceable market share. Today’s profitable industry leaders are growing their companies through their customer loyalty programs which are focused on their continuing commitment to improving the quality of their organizations on every level- at every opportunity.
6. Inspire Innovation and creativity. These two factors are the key drivers of growth in your organization. Many organizations today- still adhere to a very strict silo-type, vertical management structure which severely hampers the ability of your employees to contribute their ideas, suggestions, process improvements, etc. By creating a culture that encourages and respects employee contributions you can continuously outpace your competition and reduce employee turnover.
7. Cultivate Client/Customer Relations. Your organization would not exist without your customers/clients – and yet most companies treat this valuable asset so poorly it is a wonder they still have business. The word “cultivate” implies – continuing to improve and the word “relations” implies building a connection. A commitment to developing long-term customer relations - should always be a core value for your organization.
Studies show, people who have had a good experience with a business will become repeat customers 70% of the time. People who experienced a problem with a business, but the problem was handled to their satisfaction became repeat customers 90% of the time. Since your most profitable customer is a repeat customer, make sure you have policies in place to keep your customers satisfied.
8. Emphasize the “human” in resources. Creating a culture where employees feel valued and feel they make a contribution is the number one reason people cite for staying with a company. One of the fastest and most effective ways to erode your profitability is with high employee turnover. The cost of replacing an employee is on average more than 3 times the exiting employee’s salary plus benefits. That figure does not include the value of the intellectual property and relationships that the employee took with them. You also lose valuable time in new-hire training. On average it is a minimum of 6 months before a new hire- is fully engaged in their job and closer to a year before they are making measurable contributions.
9. Manage your technology and infrastructure productively. We live and work in a fast paced world- and the pace of change will only continue to accelerate. With all the new technologies available today – it is imperative that companies manage their resources more closely than ever before. When considering investments in your technology and infrastructure focus on the long-term productivity savings and benefits rather than the short-term expense. Too many companies lose business by not upgrading when appropriate and too many companies lose money by upgrading more often than necessary.
10. Be Proactive. Adopting a proactive strategy saves time, energy and creates “goodwill” with employees, customers/clients, vendors and the community. Nine times out of ten being reactive is only prolonging the inevitable – and doing so will result in higher costs, lower productivity and lost valuable customer/clients relations. Building your reputation on “doing right” rather than “being right” will always lead to increased profitability.
Being in business today is fun and challenging. When planning for the future create five to six BHAG’s (big, hairy, audacious goals) and then craft your growth strategies around these goals. The key to long-term, sustainable profitability is to build in flexible milestone to allow for adjustments in the economy, your industry, and changing market conditions. If you align your business strategies based on the ten commitments . . . . . . you will create a company “built to prosper.”