How Does Your Business Make Money?

Don’t laugh.

I find that many key employees, often including managers of functions, really don’t understand the whole business and what it takes both to make money and what the requirements are to make a profit. Your entire senior team needs to understand the components of the ‘profit chain,’ how it works and where the opportunities are for improvement. And a good understanding of this means a strong working knowledge of the key processes within your organization that drive value for customers.

When members of the senior team are pointing fingers at and blaming each other, it’s usually the case that they do not understand the profit chain. When functional groups and especially support groups are off doing their own thing, there’s a clear disconnect in their understanding about how they contribute to making money.

Be clear about how profits are made and what key processes and supports to line organizations are. Make sure each functional manager understands their role in driving profits and can articulate that to their people. And get them all aligned with and sharply-focused on the business strategy.

This is an important function of the top leader and a key element of getting everyone On the Same Page.

Copyright 2017 Bob Legge
Bob Legge has an unmatched ability to help clients achieve competitive advantage, leaving competitors in their dust. He has worked with companies across industries and geographies to align critical elements, dominate their markets, and achieve dramatic results, such as 600% revenue increase in three years. Personally, he enjoys sailing where both his strategic abilities and tactical skills help him see interesting places while having a fabulous time with friends and family. .
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When Self-Improvement Really Begins

I work with CEOs, presidents, and high-level executives to improve their effectiveness. While I have made exceptions, as a rule I won’t take a client who is referred to me for remedial coaching or “last chance” coaching. The reason is simple: The odds of a person making progress are slim or none if he/she doesn’t want to improve, doesn’t see the need and is unwilling to accept objective feedback.

I recently spoke to a group of about a dozen employees in a corporation on increasing personal effectiveness in their various roles. I asked each person in the group to assess eight of their personal skills and abilities are on a scale of 1 (very weak, lots of room to improve) to 10 (outstanding, can’t get much better.) Normally, individuals in groups like this will rate themselves from 4 to 8 on most items. In this group, they all scored themselves from 8 to 10 on every item. What it told me was that either the culture did not allow them to be honest in their assessments, or that they simply are not honest with themselves. If you believe that you are a 9 or a 10 in communication (as an example,) then you’re not being objective. Everyone can improve communication skills.

The first step in self-improvement is to see the need or opportunity to improve. That’s the beginning point. It doesn’t matter if others say improvement is needed; unless the individual sees the need, it’s a non-starter.

P.S. Getting to 9 or 10 on the 1-10 scale is not very important. Continual progress and improvement is.