So, your brand is growing, and with the growth comes higher head count.
In the early days, it was easy to hire and manage the people in your business.
Everyone knew each other and everyone knew what they were responsible for.
Now your brand is scaling.
A bigger business means more complexity, and more complexity means a bigger team.
Managing the bigger team is becoming harder every day.
Even worse –
With each additional team member, it’s harder to ensure that every person is truly contributing towards making the company more profitable.
You feel stuck because getting a handle on personnel profitability seems overwhelming and you don’t know where to start.
Worry no longer because I’m here to help!
Today I’m going to give you 3 simple tips that are easy to follow and are guaranteed to make each person who works for your business more profitable.
Let’s dive in!
Tip #1 – Connect Every Role to Profit Improvement
My first tip is to sit down and map out the connection between every role in your business and profitability improvement.
Why do we hire people to work for our business?
To improve profitability.
You may disagree with this statement but hear me out.
Every person you hire should either improve profit in the near term or the long term.
Every person you hire should be expected to create and execute plans that will increase revenue, decrease costs, or improve margins after the plan has been executed.
- Hiring a Supply Chain Director to move your supply chain to a lower-cost manufacturer (this improves margins)
- Hiring a developer to program software that automates repetitive tasks across the business (this reduces costs)
- Hire a Head of Growth to put together an advertising plan and hire contractors to execute ad buying (this increases revenue and possibly even improves margins)
Now that you can see the connection between the people in your business and profitability improvement, write down the connection for every role in the business and discuss it with every existing and future team member.
Do this and watch your profitability soar.
Tip #2 – Create Non-Negotiable Core Values
My second tip is to create a list of 3 to 6 non-negotiable core values that every team member must exemplify.
These core values are the personality and character traits that you believe create an attractive culture and result in extraordinary business output.
The core values for Free to Grow CFO, my Fractional CFO firm, are:
Create your set of non-negotiable core values and use them to hire, reward, and fire people and you’re profitability is sure to increase.
Tip #3 – Assess Get It, Want It, and Capacity
My third tip has two parts:
Create a bullet-pointed list of 5 to 6 roles and responsibilities that every position is accountable for.
Ask yourself how well the person in each position “gets, wants, and has the capacity” to execute her roles and responsibilities with extraordinary results.
Part 1 of this tip is pretty straightforward.
If you don’t already have a bullet-pointed list of roles and responsibilities for every person in your business then you and your team members are unclear on what they own and I’m guaranteeing they are not maximizing their contribution to company profitability. So, if you haven’t already done so, create this list ASAP.
Part 2 of the tip is the “get it, want it, capacity to do it” assessment.
Ask yourself if each person really gets, wants, and has the time and energy needed to perform their roles and responsibilities at an extraordinary level. Discuss the assessment with every person in the business and use this framework (along with core values) to hire, reward, and fire people.
Do this well and your team’s contribution to profitability will improve on a massive scale.
In conclusion, every person who works for your business exists to improve profitability in the short term or long term.
Adding another person to the business should result in increased revenue, decreased costs, or improved margins. If it doesn’t, then that position should be examined for value creation, and if more value is not created than the cost to fill the role, you may need to eliminate it.
To ensure that all current and future team members are driving profitability improvements, follow these 3 simple tips:
Write down the connection between every position in the business and profitability. Discuss this connection will all current and future team members.
Create your list of 3 to 6 non-negotiable core values; make sure that every team member exemplifies them; and use them to hire, reward, and fire people.
Make sure every team member understands the 5 to 6 roles and responsibilities she owns and regularly assess how well they “get, want and have the capacity” to perform within the role at an extraordinary level. Use this assessment (along with core values) to hire, reward, and fire people.
So there you have it –
3 simple tips for making your team more profitable.
Until next time, scale on!