environment « The Strategy Workshop

Profit Boosters – An Overview

In this series of articles, we explore ten ways in which to boost your profits. The selection on which Profit Boosters^[1] will most leverage your bottom line is a function of:

Your business model;
Where your business sits on the industry growth (evolution) curve; and
The dynamics in your current operating environment

The first step, is therefore to subjectively review each of the Profit Boosters within your context and decide on whether the potential impact on your bottom line is likely to be high, moderate or low. Once this decision has been made, you then rank order each Profit Booster relative to each other starting with the high impact Boosters and migrating to the moderate Boosters. In this way, your will focus your time, effort and resources on the Profit Booster that is likely to deliver the highest profit leverage. Low Boosters should be ignored as the cost:benefit is likely to be too small.

Each Profit Booster can be linked to a generic strategy^[2]. A generic strategy(ies) is/are selected because it is believed that the strategic platform will add disproportionate value to the business and create competitive advantage. Generic strategies are intuitively selected based on the same three criteria described above. There is therefore a correlation between generic strategies and Profit Boosters.

The Profit Boosters and their Generic Strategies appear in the table below.

	Profit Booster	Generic Strategy	Impact	Ranking
1	Business Model Multiplier Effect	Operational Excellence
2	Lower Break-even
3	Operating Agility
4	Scale
5	Focus	Product Leadership
6	Portfolio Breadth
7	First Mover Advantages
8	Control Points	Customer Intimacy
9	Network/Reputational Effects
10	Customer Embedded

In each of the articles that follow in this series, we will address one of the Profit Boosters in some detail and provide you with a template for developing a logical approach towards implementation.

^[1] Adapted from Gary Hamel, Leading the Revolution

^[2] Michael Treacy & Fred Wiersema, The Discipline of Market Leaders

Using Organisational Culture to achieve Sustainable Change

Notwithstanding the fact that most people have now accepted the inevitability of ongoing change, change initiatives seldom deliver the results that management anticipate. Why is this so?

In this blog, I examine one of the many variables that makes achieving sustainable change so difficult – organisational culture.

The 3 levels of Organisational Culture

The 3 levels of culture are:

Visible patterns of behaviour manifested as a consequence of strategy, structure and systems
Values and beliefs that are the means used to accomplish organisational goals and reflect the goals of the organisation
Underlying assumptions thar are the taken for granted assumptions about the organisational reality

Let us examine each of these 3 layers in more detail:

Visible Conscious Patterns

We see culture reflected in the strategy, structure and systems.
These are the observable components of culture.
These are generally the first levers of change. Because they are about doing i.e. they are observable, they only represent ~8% of the impact on cultural change
This is why so many change programs are not sustainable. Change programs need to include the invisible elements of 2. and 3. below

Subconscious Values and Beliefs

The values, attitudes and beliefs emerge in the goals of the organisation
Values, attitudes and beliefs affect the way people behave in achieving these goals
The collective values of the organisation reflect what is important to people who work there – the behaviours that are acceptable and unacceptable
Beliefs flow from values. Beliefs also develop over time from symbols, traditions and stories from the past
Values and beliefs are entrenched at the subconscious level

Invisible Unconscious Underlying Assumptions

The underlying assumptions and beliefs, that are held, are the major drivers of culture.
If there is inconsistency between the three layers of culture, the organisation can become dysfunctional and the organisation becomes relatively ineffective.
This is evident during times of change when there is misalignment between the new strategy, structure and systems and the values, beliefs and underlying assumptions.
When the three layers are aligned and fit with the needs and expectations of customers/clients equilibrium is re-established. This is reflected in the performance of the organisation. An effective organisation is ‘in the flow’ and brings with it a more settled and focused feel.

Change doesn’t deliver because management focus is on the wrong layer

Management generally give 90% of their focus to the visible conscious layer i.e. visible patterns of behaviour as manifested through strategy, structure and systems. In reality this layer only accounts for approximately 9% of change.

The more powerful parts are not so easily seen. Culture emanates from the underlying values, beliefs and assumptions which dominate and influence the behaviour of individuals. This is represents 92% of the total cultural influences and deals with the invisible unconscious, namely layers 2 and 3 (values and beliefs and underlying assumptions). Unless leaders engage individuals at these levels, any change will be temporary at best.

ACT NOW!

To obtain a more detailed understanding of organisational culture and how to change it using 10 cultural factors, get the Strategic Fit Culture Module – Creating Organisational Change.

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Have some questions? Need help deciding which program is right for you?