Profit = Intelligence x Discipline

Are you max­i­miz­ing prof­itabil­i­ty, or could your busi­ness grow twice as fast as it does now?

I’m not say­ing it could, but just stick with me for a second.

Con­sid­er these two major variables:

• Intel­li­gence or how smart your strat­e­gy is, and
• Dis­ci­pline in execution.

If you have intel­li­gence, and no dis­ci­pline, you get noth­ing. Your intel­li­gence is use­less. And dis­ci­pline with­out intel­li­gence can also lead to zero profit. 

As you grow and take things for grant­ed, one of these vari­ables often gets a lit­tle weak. Your strat­e­gy los­es some of its edge, dis­ci­pline gets a bit loose.

On Intel­li­gence

Intel­li­gence of your busi­ness mod­el, your strat­e­gy, the way you present and under­stand the mar­ket, and the way you meet the cus­tomer needs.

• Busi­ness mod­els vary great­ly: Not all are equal, even with­in the same indus­try. Intel­li­gence is know­ing how to max­i­mize a mod­el or see oppor­tu­ni­ties that oth­ers can’t – such as how to price smart­ly, to buy some­thing, or get a resource at an incred­i­ble price.
• Iter­ate and exe­cute: Iter­ate to turn good ideas to great ideas – and then exe­cute with dis­ci­pline, over time. Use feed­back and insights to make them better.
• Ana­lyze the data: Take the time to zoom out of dai­ly account­ing tasks to gath­er data that pro­vides insights on how to run the busi­ness bet­ter and how to evolve your busi­ness mod­el to be sig­nif­i­cant­ly more profitable.
• Best prac­tices are com­mon prac­tices: Indus­try aver­ages and best prac­tices dri­ve you into the mediocre mid­dle. If you look at indus­try data, look at the best — the high­est per­form­ing one or two com­pa­nies in your indus­try is the best benchmark.

On Dis­ci­pline

• Dis­ci­pline is learned: Ideas are a dime a dozen, but you need dis­ci­pline to exe­cute and bring them to life. Like deep finan­cial, KPI and goal reviews, and accountability.

Dis­ci­pline is about get­ting lit­tle things right 100 times in a row rather than one big thing right once.

• Stay on track: Exter­nal over­sight to keep you from dis­trac­tion is essen­tial. Such as a coach or advi­sor to under­stand the strat­e­gy, run strate­gic meet­ings, focus on the right data and met­rics, and struc­ture pri­or­i­ties. To run full finan­cial, rock, KPI, cus­tomer and employ­ee feed­back, and tal­ent reviews. To debate issues and set goals and action plans.

The Chal­lenge

• Where is the biggest oppor­tu­ni­ty for growth in your com­pa­ny, for max­i­miz­ing prof­itabil­i­ty – intel­li­gence or discipline?
• What’s the num­ber one move you could make now?

For more about why this mat­ters, lis­ten to Episode 82 of The Growth Whisperers.

Lawrence & Co’s work focus­es on sus­tain­able and enhanced growth for you and your busi­ness. Our diverse and expe­ri­enced group of advi­sors can help your lead­ers and exec­u­tive teams stay com­pet­i­tive through the use of var­i­ous learn­ing tools includ­ing work­shops, webi­na­rs, exec­u­tive retreats, or one-to-one coaching.

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