Last week we talked about making sure every employee knows how the company makes and keeps money. This week we’re taking it a step further. It’s one thing to know how your company makes money, but do you know where your company makes money? Specifically, do you know your company’s most profitable two or three offerings? More importantly, does your staff know it?
Could you be wasting time working on projects that offer you little reward? If you can identify the products or services with the best margins, you can then focus the majority of your time on those things. There’s no need to waste resources on products or services that provide a less than optimal return on your investment.
Once you have identified your company’s most profitable product(s) or service(s), share that information with your employees. They need to know and understand how their efforts contribute to the profitability of the company. Knowing the profit margins on your goods and services is a start to this understanding. Also by explaining why you’ve decided to shift your focus to certain products, i.e., because of their profitability, the staff is much more likely to buy in to this shift and help push the products they know have good margins.
Finally, what metrics do you have in place to track results? Are these metrics available to everyone involved in the process or is your staff in the dark? When employees know how they fit into the business model and how their efforts directly impact the bottom line, they become much more engaged and productive. Why? Because they instinctively know they have a stake in your company’s success. They know that their own success — as measured by salary, benefits, the possibility of growth and promotion — ultimately parallels the company’s success.