|In a low-growth global economic environment, organisations in all sectors are finding it increasingly difficult to achieve their financial goals.|
Achieving profitable growth is one of the biggest challenges facing directors and their organisations today - not many of these organisations are succeeding in driving growth in both revenue and profit.
The external challenges facing organisations are well understood. New low cost, internet-enabled business models are also disrupting many industries. Savvy customers with access to more information are demanding better value and this is forcing down profit margins. High-performing boards encourage their organisations to be outward looking, assess threats and opportunities, and compare themselves critically with their peers. Understanding customer needs and opinions is a key component of an external market orientation for all types of organisations.
There will always be some short term tactical measures that can be implemented to increase sales revenue but many of those actions won't result in increased profit and if they do, the increased sales and profit may not be sustainable.
Assuming your organisation's sales and marketing plans are built on a solid strategic foundation, boards and senior executives then need to understand and monitor the main drivers of their organisation's revenue growth. Customer loyalty and advocacy are two key drivers that are critical if boards are to have a clear picture of how their organisation is progressing and how it's likely to perform in the future.
Insync Surveys has a saying, "your employees won't look after your customers unless you look after your employees". You need to treat your employees as number one because they're the ones who look after your customers. The important role of employees in driving customer engagement, loyalty, advocacy, productivity and innovation is explained in detail in Insync Surveys' research paper, " The 5 people drivers of the Profitable Growth Cycle".
Boards will hear many thoughts, views and reasons from management for the increase or decrease in revenue, customer engagement and loyalty. But boards will only really understand the reasons and the root causes if they see objective measures and appropriate metrics of each of the main elements of the drivers of the Profitable Growth Cycle.
Early warnings will enable organisations to respond much more quickly to underlying issues that could drag performance down. A regular robust review of a well-balanced set of metrics is crucial to good governance and to sustaining strong performance.