Some businesses are in a position where they need to be optimized, others transformed. Optimization would include improving productivity and the customer experience. Transformation is generating new revenues, new service or product offerings, new business models or change of business structure.
Optimization is needed when
- There is an opportunity to increase revenues from existing services (price increases for example)
- Opportunity to improve productivity without increasing headcount (increase efficiency),
- Reducing or eliminating unnecessary expenses – ask the question “if we reduced or eliminated this expense, would it have any impact on the bottom line?”
- The customer experience needs to be improved – not delivering the value the customer is seeking – are we meeting or exceeding expectations and bringing value?
Transformation of a business comes when:
- A business expands their service or product offerings. A situation where new opportunities arise that complement their current business model that still falls within a businesses purpose or core genius of the owners. This helps make the business an ecosystem with a range of services and attracts complementary businesses that can network to create synergy
- Digitizing of services and products or creating or using new technology platforms
- New business model or structure when what you currently have in place no longer is profitable, brings value or is ideal due to market, legal or tax reasons.
Businesses owners need to consistently look at ways to optimize their business and when the opportunity or need arises, transform the business to revitalize the business. The most difficult business to transform is our own and we cannot do it alone. We need to work alongside advisors. We need to be asking the question “who can help us?” Use your cabinet of advisors, their network and get in rooms such as masterminds that provide direction and accountability.
