ARE YOU OPERATING AT peak performance? Do you spend more dollars for less return? When you invest to expand capacity, does it translate into more results (revenues and profits)? If not, you’re investing in the wrong option.Here are 10 constraints:

  1. lack of clear business objectives;
  2. lack of specific performance objectives for teams and individuals;
  3. the goals for teams and individuals don’t match the organizational objective;
  4. compensation (tangibles and intangibles) reward the wrong behaviors;
  5. lack of corrective action for poor performers;
  6. lack of role definition in achieving objectives;
  7. investing in places that don’t expand capacity;
  8. inability to execute the strategy because of skill sets, funding, or structure;
  9. perception of company, product, service, or technology does not support pricing or positioning; and
  10. poor quality in product or service.

Nine Common Traps

Many managers get caught in traps:

  • They fail to align internal operations and external perception. How you select objectives, pursue strategy, and structure resources—people, money, and systems—determine ROI and profits.
  • They grow revenues but fail to set gross margin and profitability goals.

Pursuing every sale, regardless of the cost of obtaining the sale, and not consider- ing the cost of servicing high-maintenance customers hurt the bottom-line.

  • They use the same tactics in changing or new markets. They assume that “more is better.” Before you add more sales reps, determine whether the cur- rent sales force would make more sales if they had better tools, products, ser- vice, training, and after-sale support.
  • They invest in activity that isn’t revenue-producing, capacity-expand- ing, or necessary. Balance investments in technology, sales, marketing, and product development with investment in core infrastructure.
  • They spend on image and “wants” rather than “con- tent.” High-end real estate, luxury bars, and first-class travel are unwise investments.
  • They allow compensation and benefits to grow too rapidly. Add benefits only as profits and cash flow increase.
  • They don’t deal with under- performers who drain morale, resources, and ROI. Underperformance saps the motivation of others who see slackers getting paid for not doing the job.
  • They don’t deal effectively with valued employees who need a new skill set or growth experience. You might move this person, develop a transition plan, or identify new options.
  • They fail to identify the reason for poor performance. Invite your people to point out the issues. Be open to the good, bad, and ugly news.

You can overcome what’s holding you back, avoid traps, and boost sales. SSE

ACTION: Avoid these constraints and traps.

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