• November 16, 2022
• By Rick Arthur
• In Business success, Product, Profitability
• No Comment
• 0

Profitability is affected by a variety of factors, not all of which are strictly financial. In recent months I’ve reviewed my Five Ps of Profitability which include People, Product, Process, Price, and Planning. These five encompass the philosophy that is at the center of the business operating model I’ve developed and are integral to both your strategic plan and day-to-day operations.

I’ve discussed in detail, the Process, Price, and Planning components. In this blog, we’ll take an in-depth look at Product – an element about which clarity is essential, especially as you prepare to enter a new year.

Your product (or service) is what you sell, and much more. It’s the manifestation of your vision, the tangible result of what motivated you to start your business in the first place. Your product is the solution to the problem that you’re in business to solve, and your contribution to making life better for your customers. An extension of who you are, it’s the manifestation of your “why.” With that realization, it becomes apparent that clarity of vision is at the heart of your success.

In his book, Traction: Get a Grip on Your Business, author Gino Wickman advocates creating a vision that is bigger than yourself and that “points the way to a greater good.” He offers eight questions that he says must be answered in order to create a strong vision for your organization.

1. What are your core values? Wickman defines core values as “a small set of timeless guiding principles” and recommends limiting them to between three and seven. These core values define your company’s culture, what characterizes your People, and will help you attract those that are like-minded.
2. What is your core focus? The basis for your core focus goes back to your why…. Why does your business exist? What is its purpose? What is its niche? Articulate the core focus of your business and operate so that nothing distracts you from it.
3. What is your 10-year target? Successful companies and individuals set and achieve goals. Define where you want your organization to be in a decade. This long-range vision gives your company direction and helps to define shorter-term objectives.
4. What is your marketing strategy? Wickman points out that you can’t be all things to all people. You must identify your ideal customer, what you are supposed to do for them and how you’ll do it. He recommends considering your own experiences, core values and core competencies when defining your ideal client.
5. What is your three-year picture? Wickman contends that there’s little value in investing time and money into detailed strategic planning beyond a three-year window because of the rapid pace of life, business, and change. But he points out that its value is in providing your People with a clear vision and direction, and as a tool for improving the one-year planning process.
6. What is your one-year plan? Your one-year plan will define what you must do in the next 12 months to make your vision real. Wickman cautions against trying to accomplish too many objectives in too short a time, warning that this can result in setbacks and frustration. Ensure that your plan is attainable.
7. What are your quarterly Rocks? Wickman recommends setting priorities each quarter, based on your one-year plan. He refers to these priorities as “Rocks.” These are imperatives that must be accomplished to keep you on track to achieve the objectives of your one-year plan, with your three-year picture in mind. These “Rocks” give you traction and enable productivity by providing focus and specific direction.
8. What are your issues? Although it may seem strange to include a list of problems as part of your vision, this practice is actually very valuable. Every person and business have issues; success is impacted by the ability to resolve them. Embrace those obstacles and document them. Once they are acknowledged you’ll start to find ways to resolve and get ahead of them rather than allowing yourself to be blind-sided.

Assess Your Product in Light of Your Vision

As noted, your product or service is the tangible manifestation or expression of your vision. Once you’ve created or clarified your vision, assess, or reassess your product. Ask and answer these questions that are specific to your actual product or service:

• How is your product positioned?
• What is the size of your market?
• Do you know your production capacity?
• Do you have the right key performance indicators in place?
• Do you have proof of concept – have you sold sufficient quantities to your market?

As the former owner of a multi-million-dollar company, I’m a CFO with a CEO perspective, which provides me with a unique understanding of the Five Ps of Business Success and how each contributes to a company’s overall performance. I’d welcome the opportunity to help you find the freedom and empowerment that clarifying your vision and its relationship to product affords. Contact me for a complimentary consultation.