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.

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