Two business consultants outline strategies for success in determining the road to corporate profitability.
There are two kinds of key decisions that all people make in their personal lives or in professional settings. They involve either resource allocation orfinding direction or often a combination of the two. On a personal level, this could be where to live, work, and who to marry. Travel distance between home and work deals with the most precious resource, time. How much income to spend on property is a resource allocation issue.
Decisions in choosing a career may involve not only compensation but also factors such as the skills that are acquired that should benefit us in the future. In the corporate world, budget allocations to business units, product lines, projects and product features to attract customers deal with resource allocation and impact product strategy.
These decisions shape the future of our businesses and influence the direction and the corporation’s future. Decisions in corporate finance involve resource allocation; strategy decisions shape companies’ future directions. To be successful in the long run, it is important that resources are allocated in the “right” direction or to the direction we are heading. Undeniably, decisions on these two issues today determine the future of businesses and lives for years to come.
What makes the “Right Direction”?
A viable business must have these priorities:
1. An Inspiring Direction: The vision and mission of the founder of the business is a goal to achieve as an organization. This vision and mission can be something that the founder is eager to do even for free before it becomes a business. For an individual trained in pharmacy, this could be helping relieve people of pain, or finding a cure for a disease.
With an inspiring vision and mission, the company becomes stronger in what it does because of the passion it instills in all of its human resources, from top management down to the lowest-level employee. When all are passionate about achieving, it is not uncommon that employees in the organization can’t wait to arrive at work.
Think of Apple, whose mission is to make technology products accessible, pleasant and appealing to the masses, and whose popular CEO, Steve Jobs, has a salary of US$1.
2. A Strong Core Competency:
A company needs to understand the core competency or dominant corporate DNA that it possesses. A successful company allocates its own resources and expands by capitalizing on its own core strength. Although there may be countless successful new entrants in any industry, it is necessary to acquire skills particular to an industry to execute well. This does not pertain to managing accounts receivable or on-time delivery but something that a company does particularly well that even competitors salute.
Examples are: a leadingedge technology, an insight into the customer group, a grip over a distribution channel or a geographical market that is penetrated.....................