Top 10 Ways Successful Businesses Leave Significant Profit on the Table

I encounter many businesses that appear to be performing well. They are profitable, sales are growing, and the balance sheet appears to be strengthening. However, a closer look indicates that all is not well – or at least, all is not nearly as good as it could be. These businesses have multiple operating weaknesses that are not being addressed, and they are depending on one or two key strengths to compensate in order to achieve profitability. This approach is risky and rarely sustainable.

If the weaknesses are not resolved their negative impact on profit typically grows and can actually jeopardize the entire business model.

The top 10 operating weaknesses that lead to underperformance are;

1. Written action plans are not used.
2. Lack of clarity regarding manager’s responsibilities, authorities and decision making.
3. Actionable dashboards are not utilized. 
4. Budget responsibilities are vague or missing. 
5. Lack of training programs for staff, managers and leaders. 
6. No written ‘Culture Code’ to guide employee behaviors.
7. Ineffective reporting system for leads, quotes and sales.
8. Failure to understand whether existing products are a distinct offering, have unique features or are commodities. 
9. Outdated customer satisfaction measures. 
10. There is no formal system of innovation – i.e. to relentlessly pursue providing new products and/or additional value to your customers.

Notwithstanding the above, the most serious symptom or indicator that a business is underperforming and leaving significant profit on the table is a failure of the leaders to acknowledge that there are any operating weaknesses that need to be addressed.