How to Increase Profit and Wages Simultaneously

All business leaders today are looking for ways to decrease costs, while increasing productivity and profit. Many businesses today are taking a one time profitability boost by reducing costs at the expense of the employees.

Cost cutting always seems to be the first action taken by companies as they try to increase their profit. I understand that some businesses are in trouble and this may be their only recourse. However, many businesses rely on this cost lever rather than looking at all the other options available to increase profitability.

Henry Ford

Most people know that Henry Ford was quite famous for piloting the assembly line factory and for increasing the productivity of his factories. But did you know that he was able to simultaneously increase profits while decreasing production costs, increasing productivity, and increasing employee’s wages?

How to Be Relentlessly Committed to Self-Disruption

Disruption is highly uncomfortable! Purposefully causing disruption inside your business seems like a stupid thing to do! For what reason would you want to disrupt something that is running smoothly?

Well, for starters, building a business that never changes is a flawed business strategy. A business that is too rigid to change will be obliterated by the fast-changing marketplace! As Clayton Christensen pointed out in the Innovator’s Dilemma, the fact that you are successful makes it hard to keep the edge you need to win in the future!

We do not have to look too hard before we find prime examples of businesses that were once at the top of their game and now have failed or are basically on their death bed! It is clear that they were not relentlessly committed to self disruption.

The easy examples that always get the spotlight are businesses like Blockbuster, Sears, and Toys R Us. But, there are countless others including Radio Shack, Vitamin World, Gymboree, Swissair, Woolworth’s, Sharper Image, Polaroid, and the list goes on!

So, what can a business leader do to productively disrupt their business?

“Surely You’re Joking, Mr. Feynman!”

Adventures of a Curious Character

My book review this week is Surely You’re Joking Mr. Feynman by Richard P. Feynman.

Besides winning the Nobel Prize in physics in 1965, Feynman was an eccentric, larger than life character with a list of achievements and accolades that are hard to fathom. He actively worked on the development of the atomic bomb, traded ideas with Einstein, Bohr, and Nick the Greek, cracked safes guarding highly sensitive atomic secrets, played bongo drums for a ballet, along with a host of other eclectic activities and accomplishments. This is a highly entertaining book full of funny stories, technical theory, and valuable life principles.

My takeaways from this book are the principles that Feynman discovered and exemplified throughout his life. I have listed a few of them below:

5 Simple Steps To Fail Your Way To Success

The goal, then, is to uncouple fear and failure – to create an environment in which making mistakes doesn’t strike terror into your employees’ hearts.Ed Catmull

 

Organizations that value growth and success encourage their employees to innovate, try new things and stretch the boundaries of the business. These organizations embrace failure because they realize without failure an organization cannot grow and reach new levels of success. They also know that if an organization is not growing then it is stagnating . . . and stagnating businesses fail.

My son and a few of his friends started a landscape and lawn care company this summer. They built a website, flyers, posters and brochures. They knocked on doors, distributed flyers and sold their services to as many people as they could. Once they landed enough customers, they went and rented an aerator and power rake and worked their tails off. At the end of the first day they had lost $15! Talk about a disappointing failure!

How Smart Thinking Can Improve Your Business, Engage Your Employees and Satisfy Your Customers

Leaders of successful businesses foster innovative work environments where their employees are able to creatively apply their knowledge and strengths to solve their customers’ problems. This sort of work environment is motivating for employees, results in happy, repeat customers that are happy to pay for your services and products. It is a win-win-win for everyone.

Back in the early 90’s I worked for a consulting company that had this mindset. Employees were encouraged to work with customers to identify areas in their businesses that could be improved. We then proposed a number of solutions to deal with these improvement opportunities and the customers would hire us to implement them.