Let’s just say your revenues for this year will be the same as they were the year before. When most of us think about increasing profitability on flat revenues, we generally start with efficiency reviews. Can we cut this, or outsource that? Can we find a new provider for this service or lower our labor costs? These are certainly valid approaches to cost containment, but there are a few additional things you can consider to increase profitability.
According to Rodd Wagner and James Harter, authors of the 2006 book “12: The Elements of Great Managing”,the workplace can be a source for finding increased profits. Wagner and Harter call out 12 elements of great management and their research shows that if those elements are visible and the following conditions exist, then a company can indeed become more profitable.
The question then remains, does your workforce:
- Feel they have the opportunity and tools to do their best – every day?
- Believe their fellow employees were committed to quality and success?
- Feel that their opinions counted, they could act on those opinions and that it would affect the performance of the company?
- Sense a connection between their work and the company’s mission?
Containing costs is critical, but don’t forget to pay attention to the workplace. You’ll never know the impact it has until you ignore it.