Businesses, like schools, have a GPA –
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Your Business GPA
I’ve always believed that the fundamentals of
business are simple and that people complicate things. As with most issues in life, we can be our own worst enemy.
We lose focus, get excited by the new rather than seeing things through, procrastinate on challenging yet necessary tasks we don’t like, take an optimistic rather than pragmatic approach when it comes to our
finances, struggle with holding others accountable, practice
avoidance when it comes to addressing difficult issues;
wait until the last minute on important deadlines; neglect critical relationships; and
bet on the wrong people; etc.
In my experience, seven key fundamentals have emerged as the most important areas of focus for any business:
- You must identify and sell to new customers
- You must maximize revenue opportunities from existing customers
- You must manage your operations effectively to maximize the bottom line
- You must first consistently meet and then strive to exceed the expectations of your customers
- You must recruit and retain talented employees
- You must foster a culture of innovation and continuous improvement
- You must manage business risk proactively
I often ask my clients to think of this as their business
Grade Point Average (GPA). Their goal should be to achieve a 4.0 GPA, which is the equivalent of an A grade on each item. Put another way, the ultimate goal of any business should be to have
high-quality employees who are focused on providing
value-added services to a loyal and growing client base efficiently and profitably. Anything else is a distraction. And,
the workplace is full of distractions.
Many leaders rationalize that achieving these seven objectives at a consistently high level is not possible. They reference people, financial, operational, technological, and market realities as
obstacles strewn in their pathway to success. While many of these issues may be true (in a relative context), I’ve always been able to identify organizations that figure out a way to succeed despite these very same pressures. Why? This is due to their ability to face their challenges head-on and return to fundamental business principles.
Your people will make or break you. Growth is not an option; it’s a business imperative.
Diversification of client/market/product risk is key to your long-term survival. The economics of your business model need to ultimately work. You must also deliver on your product/service promise and satisfy the needs of your clients, or someone else will. It truly is this simple. If a
senior management team or leader of a small organization can stay focused and committed to these six areas, good things will happen—it’s inevitable!
