It’s all too easy for business executives—especially executives in large organizations—to forget that their strategies must turn a profit. Insulated from the day-to-day operations, these executives often get caught up in "high-level" strategic thinking, creating elegant business plans that might earn them an A in business school but don’t provide immediate revenue. Certainly, they understand the importance of making a profit, but they justify their strategies to themselves and others with talk of long-term profits and of getting a foot in the door of an emerging market. All this is fine, but, as Tony knows, if you don’t meet the daily nut, someone will turn the screws on you.
TONY ON THE IMPORTANCE OF GOOD PROFIT MARGINS
"Sil runs the most profitable strip club in North Jersey."
Tony’s strategic philosophy is to think constantly about novel ways to make money. As part of his philosophy, Tony’s focus is on how to maximize the spending capacity of his customer base. In other words, he always looks for a clever scheme to capitalize on the greed and other base desires of the human race. Tony encourages all his men to take responsibility for developing new ways to earn a buck. This does not always have to involve a big idea. It can be small ideas for a few thousand dollars. These add up just as easily.
The culture of Tony’s crew is that it’s everyone’s job to come up with moneymaking schemes. In many companies today, this is often the job of a handful of people in the New Business group. Not too long ago, a senior leader with a large packaged-goods company told me he was talking with his people about a new strategy and one of his direct reports said they didn’t have to spend time discussing strategic options because their New Business team would come up with them. The leader immediately explained that new business was everyone’s role, but, clearly, this wasn’t how this direct report and others in the company thought about it. Strategic thinking often isn’t rewarded or motivated outside of a small group of people. Just as significantly, managers complain they don’t have the time for creative, blue-sky thinking that results in viable strategies.
If you want to foster a money mind-set in your group, try the following Tony-like techniques.
Consistently talk about the need for fresh ideas. Fresh ideas can lead to profitable new ventures. Make a concerted effort to bring this subject up in formal meetings as well as in one-on-one conversations.
Reward your people. They deserve recognition not just for coming up with successful strategies but also for making strategic thinking a priority. Use everything from compliments to performance reviews and monetary incentives to demonstrate your desire for more moneymaking concepts and plans; make the money mind-set part of the culture so that people wake up thinking about new customers and new business.
Model the moneymaking mind-set. In other words, float your own trial balloons for various profitable ventures. Watch how Tony gets a glint in his eye when he thinks of a scheme and listen to the enthusiasm with which he presents it. Even if his scheme isn’t viable, he clearly relishes talking about moneymaking ideas, and his enthusiasm for them is infectious.