Keeping a profit culture mindset means focusing on long-term, success and acknowledging profit as the primary force in creating jobs, expanding plants and investing in equipment.
Creating a profit culture is a fundamental shift in the way we view business and the way we do business.
A profit culture is a mindset that focuses on long-term, sustained success. It is a culture which acknowledges profit as the primary force in job creation, plant expansion and equipment investment. It acknowledges profit as the fundamental support or research and development commitment. It acknowledges profit not as a goal, but always as a mindset.
A profit culture supports the Faranda maxim; “The mission of the organization is to create wealth for its stockholders and stakeholders, while it serves society.”
Creating a profit culture is different than creating new corporate bureaucracies or new corporate divisions. Those are the old patterns, which have been downsized or re-engineered out of existence and will, hopefully, rest with the dinosaurs.
Creating a profit culture is a process where the goal is to reassemble your internal and external competitive components into a more creative, efficient and profitable manner.
The external component is a networking process that features strategic alliances and partnerships as well as different leadership perspectives and management actions.
One example is the formation of unique networks with such non-traditional entities as your competition, governments or an industry player in another country, and that would result in a benefit to each party from the other’s client base.
The agreement between IBM and Apple is an example of a competitive alliance that will foster product and market share growth by combining the strengths of both parties into a common strategic goal and a mutually profitable result.
The external component can also be an agreement between large firms with great capital balances and small firms with emerging technologies that need capital to allow them to fulfill their potential. This creates a “partnership of unequals” but it provides continued growth for both parties.
The external component can include new management actions such as competitive intelligence gathering to monitor competitor’s prices and procedures. Or, new leadership perspectives such as developing three-level contingency plans for best-case, expected-case, and worst-case scenarios. It can also include the use of a professional board of advisors to provide outside guidance and new ideas.
The external goal is the mix corporate and individual talents with new formulas to create an industrial symbiosis that enables all parties in the network to thrive.
The internal component is much harder and requires a complete re-evaluation of what you do, how you do it and why you do it that way–or at all. A major consulting question in the process comes from Peter Drucker who asks his clients, “If you weren’t doing it right now, would you start doing it?” The goal is to question everything you are doing, then pull the pieces of your puzzle apart and reassemble them in a more efficient and profitable manner.
Ideas include such things as “leasing” rather than “buying” employees, outsourcing a professional currency trading to earn passive income on your cash assets, hiring (or leasing or outsourcing) a professional collections manager to boost cash flow. It includes anything you can do to create an internal profit culture.
Remember, the goal of the internal component is to identify opportunities to improve the bottom line by reevaluating and restructuring each individual profit contributor in the organization.
Creating a profit culture is an internal and external process driven by a profit mindset. It is a method of making the organization more efficient and positioning the firm to take advantage of market opportunities. Do it well and you will grow your organization profitably.