3 Ways Your Decisions Drive Business Culture and Therefore Profits

3 Ways Your Decisions Drive Business Culture and Therefore Profits

You want a profitable company. Therefore you need a culture that knows how to become a “go to” company.

You want to grow so your company will be acquired one day, when you are ready to exit, having made your business saleable. To attract a buyer, you need to have wrapped your secret sauce into your culture. That way you will be profitable now and attractive to buyers when you exit.

What this all boils down to is if your decisions are based on cost cutting without strategic focus or on getting things done to schedule, rather than your strategic focus, your business loses.

Case in point? Apple without Steve Jobs. Apple is a ‘go to’ company. Their culture of innovation has made it profitable. But Apple is also a public company whip sawed by having to report profits quarterly. When the CEO listens to the analysts, rather than the innovators, and bases decisions that way, the culture shifts. And the secret sauce begins to bleed away.

Om Malik of Gigaom.com reports that Apple has become much more of a schedule-driven culture than an innovation-driven culture. In the old Apple culture, products would ship when they were ready for prime time and not before. Maps arrived on the scene this year incomplete and missing that ‘Apple secret sauce’ that we all have become fans of.

Now, according to Malik, leaders in Apple are less daring in trying to make the time consuming improvements that make their products heads above all competitors. So they take less risks. And that attitude and fear drive decision making. A new decision default system is then communicated on down the chain. “Meet schedules, don’t take risks, or you will be blamed.” This attitude now becomes the expected behaviour.

If you want a company that can grow and become saleable (since most companies are not saleable despite the owners’ belief that they will be able to sell the business when they want, for what they want just because it is successful) then you have to have a counter intuitive decision making philosophy.

  1. WHAT’S YOUR YARDSTICK? Always use this yardstick to measure whether your decisions will steer you toward being a go-to company or not: “Is this going to take away our secret sauce or deliver it?”
  2. WHAT’S YOUR PRIMARY DRIVER? Remember all decisions have three factors: time, cost or quality. Only two of these factors can be executed successfully. The third factor will come last. If you always pick time (getting it done fast or to a schedule) then either cost or quality will suffer. In our culture, getting it done fast is energizing, valued and makes people heroes. But does little to help you become the go to company. If you want to ensure your secret sauce is part of every decision, then you have to pick quality as the top driver in your decisions. And that means you have to manage time (when things get done) in an new uncomfortable way. If you lead with quality, your staff has permission to attend to the integration of everything you do.
  3. THE WRONG DRIVER ERODES PROFITS Fixing mistakes that show up because time was the priority get very expensive. That’s why profits erode. That’s why pricing power evaporates. That’s when you start losing market share because your stuff and your ways are becoming more like your competitors.

What do you want to use as your decision yardstick to grow? Pick a lane now, once and for all. Commit. Let your staff and management team know your expectations. And be prepared for the arguments you will get when time stops being rewarded.

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