Regardless of whether the recession is over or not, these past two years or so have been quite the professional experience for most of us. If you have been in business for these past twenty-four plus months and have not had a negative change in revenue or an increase in challenge or responsibility, you are the last one standing.
But contrary to many experts’ opinions, applying positive economic change in the Triangle or the country is not rocket science. We just need to take a look at the Business P’s. In core business models, there are certain critical ingredients that always start with the letter P. Organizations today just need to arrange them in their proper order. Some of us might even have them mixed up just a little bit; but even a little out of order is a recipe for failure.
All of us remember what happened in the third quarter of 2008 very well. Lehman Brothers and Wall Street dominated the financial bad news. These out of order P’s were the only reason why our business world changed as we knew it into complete financial collapse.
Here are the Business P’s in the order that they were in back in September, 2008.
Profits, Problems, Payroll, Processes, Priorities, Principles, People.
Note that profits come up first. Now, profits are just fine by themselves. In fact, profits are quite simple to get and quite exciting to manage in ANY economy if our P’s are in the right order. But profits should never be the main focus of any organization. Too much profit attention can create greed and internal conflict.
Greed was the driver of this recession and it kick started the mess we are still in regardless of any recovery headlines we see on the web and in print. Greed affects all the Business P’s and twists them one by one into disorder.
Here is the sequence the Business P’s should be in:
People, Principles, Priorities, Processes, Payroll, Problems, and Profits.
What? Profits cannot be last. Jim are you crazy? Yes, I guess I am. But I am crazy about wanting organizations successful. You see, profits are the BYPRODUCT of all the other P’s. We seldom think of profits in this secondary way. It is not our normal business nature. But the thought is immediately common sense if we look at profits from our human nature with a complete focus on people.
People are and still remain the straightest line to all profitability.
We must take care of our employees and our customers in positive ways (Human Relations Theory) and we must involve them in processes that truly let them contribute to the bottom line (Group Dynamics Theory). If we succeed at these two proven theories we become the leaders within our business orbit. The discussion of these two theories for this article’s purpose is not necessary. But I want you to Google or Bing them and read why they are so essential to the mindset of business. Both theories give us empirically proven strategies for success.
Principles are extremely important as well. Mission and Guiding Values must be solely focused through people. Employees, Suppliers, and Customers are the only reasons we exist as a business. And principles cannot be just words handed out on orientation day in a 20 word mission statement or stuck on page two of your employee handbook. We must back them up with consistent ACTION and complete transparency. Our people and our customers are not dumb. They know when there is shallowness to organizational values.
Priorities must be a blend of both people and principles. If not sure, just ask the people in the business we want more successful. If there is the right organizational climate where risk and work are appreciated equally, the employees will not hesitate to help with ideas that path the business to increased opportunity.
Processes are derived from Priorities. If the priorities are clear, then the processes are definable, trend-able, measurable, attainable and trainable. They become team driven and more easily team implemented.
Payroll is the reward of good people. Pay your employees for what they really do and have them on the same page when performance is assessed. Have a simple and competitive pay plan and be prepared to explain it at any time. A workforce, paid fairly and honestly, will eliminate many organizational problems. The most successful companies have minimized intra-business issues by providing positive compensation and they have converted problems into opportunities.
Finally, let’s look at profits. Remember that byproduct thing I mentioned earlier? If all your P’s are in order, profits will organically and almost magically come. Employees will grow at the same rate that profits and success do. Customers will be more like a referral fan club than just another dollar. Just as health is the byproduct of good living, profit is the byproduct of solid organizations.
Now, I know I am preaching to many of you in the choir. BUT, there are many managers out there who focus on money and profit first at the expense of everyone else and they have employee and customer concerns galore. Such strong emphasis on profits will only create and sustain greed. And it was greed that took down much of what we had in this once strong economy.
I know of many private and one major public institution today, all bureaucratic in nature, that truly need to be walked and quickly to the proverbial shed. For this great country to grow out of this current recessional cycle we must put our people first and our profits last. Our profits will do just fine if all of our P’s are in order.
It simply starts with our people. Make sure they are all good at what they do. Make sure they put the clients first. And that they really care for them. Give employees the tools and the training they need. Treat them right and watch the profits grow. Just remember that this is a major paradigm shift for many, but I urge you to try these ideas and see if your Business P’s can line up and work for the good of the business and in the best interests of both your people and your customers. Your profit depends on it.
