6 Ways to Uncover Profits

One of the first ideas to embrace as a leader is the fact that somewhere in your company there are tens of thousands, maybe even millions of dollars of profitability locked up needlessly in legacy processes, outdated technology, or underutilized assets. A critical part of your job is to constantly be on the lookout for these untapped pockets of opportunity and find ways to unleash them.

This article will help you consider the key aspect of unlocking hidden profitability, your employees.  Without a doubt, they can be directed into more profitable actions that will also give them a greater sense of job satisfaction. These six actions aren’t exhaustive, but they should stimulate your thinking.

1.            Analyze job performance. Some people are stars, some may need training, and some may need to be replaced. Some stars may even need to be replaced if they are taking you in a direction different from your vision.

• For each position, list the name of the incumbent, what needs to be accomplished, what’s actually occurring, and what isn't happening.
• Decide how best to bridge the gap of what isn't being accomplished.
  • Does it truly need to be accomplished?
  • Does it actually need to be accomplished from this position?
  • With training, can the person occupying the role achieve the needed results?

2.            Focus on strengths. As a corollary to matching job results with job needs, why not restructure your jobs to focus on each employee's strengths? You may have talented people in the wrong positions, or people who are fantastic at two thirds of their job description, but not at the other third. In the latter case most companies would create a corrective action plan to have the employee "overcome" their weakness.

• Using a tool like StrengthsFinder or MCORE, do a strengths inventory of each of your employees and match their strengths and interests with appropriate jobs. Restructure your positions according to employee strengths. Don't let job descriptions rule you.

3.            Identify high value actions. People like to work hard and be busy, but sometimes they're busy working on tasks that aren't very important, or that were important once but now are not. Your job as a leader is to continually redefine what the most valuable tasks (and results) are and outsource, delegate, automate, or somehow eliminate the tasks that are not providing high value to your clients or accelerating you toward your goals.

• Have employees list the ten things they spend the most time on and rate those items high to low based on how much value they add. I have done this exercise with numerous teams, and invariably only two or three items are really high value generators. Most everything else can be eliminated, outsourced, automated, or consolidated. Then, help your people focus more on what really matters.

4.            Overhaul processes. People can be focused on the right things but taking four times longer to do it than necessary if they're using old or outdated processes. This was the case with a client I worked with that wanted to increase consumer lending. They were going to mandate that every branch increase loans by the same amount. Through technology and analytics my team and I were able to show them the different demand at each branch so they could set their goals and allocate resources accordingly.

• Outside experts with fresh sets of eyes can help because they are not biased to your processes.

5.            Align incentives.  Are you motivating the right behaviors and actions? Is your incentive plan doing what you want it to do?  Like the most important tasks, incentive plans are focused on what was important yesterday but not on what makes customers loyal today.

• Make sure your incentives encourage employees to follow your strategy, brand promise, and create an excellent customer experience.

6.            Unleash thought leaders. The answers to many of your company's growth, financial, marketing, customer service, or operational issues walk in the door every day and leave at night. Are you turning them loose to solve critical problems, or are their jobs so consuming that they have no time to innovate?

• Find time for employees to form cross-functional innovation groups and give them problems to solve. If you’re streamlining your jobs so they do the most important tasks and eliminate or reduce time spent on low value tasks you will free up time for your employees. 
• Make sure to implement at least some of their ideas. Praise even the bad ideas, because at least they were thinking and giving it a good effort.

These six strategies represent a significant way to tackle hidden profitability. If you focus on implementing them you will be amazed at the results.

Scott McClymonds is a veteran leader in the financial services industry and expert at integrating analytics, leadership, and culture to dramatically accelerate growth and profitability. His company, CEO Velocity, works with successful financial services CEOs who are committed to their members and communities. Scott’s blog is at ceovelocity.com/blog, and he can be reached at 479.263.0774, linkedin.com/in/scottmcclymonds.