(Co-Authored by Aaron Schulman & Tim Scholten)
If you don’t know how to accurately diagnose root causes to bottlenecks and problems in your business, you will never figure out how to clear the actual issue so your business can thrive the way it can and should.
But before you can diagnose any issues, you first need to know how to properly “Frame” your business. If you have not read our “Frame” process, do that first here
Once you properly frame your business, then you can move beyond to the “Diagnose” Step, which is step 2 in our Market Beating Strategy Framework, the process we invented that has helped hundreds of businesses, banks and organizations breakthrough to higher levels of success, profitability and prosperity than they ever could achieve before.
If you would like to schedule a free strategy session so we can help you get started on your own Market Beating Strategy, schedule your free strategy session here.
Now for step 2, Diagnose.
When you follow our Market Beating Strategy, we will help you Diagnose how your business can make more money – developing a fool-proof plan to maximize profitability by ensuring things run smoothly.
This will help you leverage your most profitable activities and uncover ways to minimize expenses.
So what are the signs and symptoms that your business / team needs to master “Diagnosing“
-You are chasing every sale, even when it isn’t making a real profit
-Cost always seem out of control
-You don’t have a good handle on your key metrics that forecast how your business is and will perform
-You seem to have consistent cash flow problems
-Defects, loss and waste are having a substantial impact to your bottom line and are out of control
-Chaotic workflows and disruptive handoffs between teams or groups that cause delays in delivery of your goods or services to your customers
After you master the skill of “Diagnosing” through our Marketing Beating Strategy (™) Process, your business will exhibit these characteristics of a thriving business:
-You know your most profitable lines of business and are focused on nurturing them
-You understand and control your costs
-You have a good handle on your key metrics that tell you how your team is performing
-You can forecast your profits because you you know what drives them
-You are able to control and manage your growth and and cash flow
-You are managing defects, loss and waste
With your proper “Frame” in hand from step 1, you now have clear boundaries, goals, key initiatives and benchmarks to begin diagnosing the real bottlenecks and wasted resources in your business.
Case Study #1
One client couldn’t achieve a closing time similar to their peers in their mortgage operation. They earned the reputation of being good, but slow. In the mortgage business, you won’t get much business from realtor partners if you are slow. Time often kills deals. A fact that most people know. Yet no matter how hard they tried they couldn’t improve their turn times.
That is when we helped them diagnose their root cause.
We did that by process mapping their end-to-end process. We captured every step of everyone involved in the process from application to post-closing activities. In addition we captured how long each of those steps took and determined what needed to happen before that step could begin. Once we understood dependencies and timelines we were finally able to diagnose the root cause of their delay.
It turned out to be really simple.
Their title work was almost always the source of the delay. They were starting the process for ordering the title searches needed later in the process than they should. Their reasons for the timing made sense, but not to the point that added two full weeks to their time to process a loan. We were able to implement a new solution the next day and proved that they could now close loans in two thirds the time previously. That time saved got them back in the game and now they could prove that they were both good and timely with their ability to meet their clients expectations.
Case Study #2
Diagnosing how you make money is your next step after learning to properly frame your business. Understanding what drives your profits as well as your costs is important for developing and prioritizing strategy. I have worked with teams that knew how they made money overall, but never really understood what was driving most of their income. While working overseas, I worked with a Hospital that also had a Nursing School. The school was important to them as nurses weren’t abundantly available. Their nursing school became renowned for producing great nurses. Other hospitals often hired them before they finished their commitments to this hospital.
They were quite frustrated with constant nursing shortages. When we asked them why this was still a problem, it was because they couldn’t expand the nursing program to meet both the internal and external demand for nurses. When we again asked why, it was because of a shortage of housing for the nursing school.
We conducted an analysis for them. Much to their surprise, we discovered that their nursing school was one of the most profitable arms of the hospital. Finding a way to expand the nursing school seemed to make much more sense. When we studied it further, we found that they could pay for new housing in as little as 3 years by adding 100 rooms to their dormitory and 100 nursing students to their program. This would create more profit for the hospital and solve their constant shortage of nurses.
What was always their number one problem in the past became their number one strategy and number one opportunity for growth for the coming year.
Diagnosing your specific issues, challenges and opportunities is your next step.
Here are some questions to help get you started…
What part of your business drives the greatest portion of your revenue?
What part of your business drives the greatest portion of your expense?
What might be preventing you from growing your most profitable segment?
What new opportunities do you have to grow your business?
Are there ways to improve the profitability of this or other segments of your business?
Are there technological advances that could help you improve?
Are there other markets in which you could operate more profitably? (better margins or lower costs)
What technology do you already own that you are NOT fully leveraging?
Are there new products or services that you could cross-sell to new and existing customers that would drive increased profits?
Are there new partnership opportunities that would allow you to expand at little or no cost?
Another way to diagnose problems that could turn into profit centers is to ask the following questions:
How well is our product service meeting our ideal client’s needs?
Where do you fall in terms of:
Speed (Order to fulfillment)?
How easy are we to do business with?
How does this compare to our toughest competitors in the business?
What other potential needs do our clients have that we could help them with?
These are just the beginning identification questions. Once you know that Speed for example is an issue, you now need to do a deep dive into what takes so long. If your sales are lower than they should be….It could be any of the above or sales or marketing, etc. The point of this exercise is that there is a real art to this. Knowing how to ask the right questions and dig to find out the core issue is the expertise needed to effectively diagnose issues. And, from a few decades in business, we have seen consistently that business owners are often too close to their business to be able to diagnose their own issues.
Case Study #3
I worked with a hospital client overseas that was experiencing severe cash flow issues. They constantly received gifts of used medical equipment from the US. They felt obligated to utilize these gifts for their intended purpose, but a deeper diagnosis showed that there either wasn’t much demand or need within their local area to justify implementing that equipment, or the cost of implementation was far too great to sustain.
So in layman’s terms, their free, donated equipment was breaking their budget and causing a cashflow crisis. Once we uncovered that reality, we were able to go back to some donors who had already shipped equipment and ask if they cared if we sold it to supplement operating costs. They were fine with it. For those that wanted to donate equipment but hadn’t shipped it yet, we were able to save them all sorts of logistics challenges by simply asking if they would be willing to sell the equipment there in the US and send the proceeds to the Hospital to help with their priority initiatives. Again, the donors were more than willing and loved the idea of supporting the Hospital’s priorities.
What can you do next to break through to a thriving business and better profitability?
Take the next step and schedule your free strategy session today, and we will help you with our “Diagnose” process to help you experience new, focused, powerful prosperity and unity in your business.
Business is ALL about Relationships and It ALWAYS has been, but do you know how much revenue you are losing because your bankers have never been taught how to use client interactions to build strong relationships? It is obvious to most of us that the statement,…
While branches are still the most expensive delivery channel for your bank, it is still the most effective channel for engaging and educating your customers on how to leverage multiple channels for convenience and timely information. A recent study I read stated that…
If you are a Banker and you are reading this, you can’t afford to ignore this #1 strategy if you want truly satisfied clients and thriving profitability. They say, “first impressions are everything.” But is your team consistently creating the best first impression……