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The 7 percent solution

Posted: July 13, 2014 2:00 a.m.
Updated: July 13, 2014 2:00 a.m.
 

One of the most interesting behavioral concepts discovered is the winning edge. This principle states that small differences in key action areas can translate into enormous differences in results.
The single degree between 211 degrees Fahrenheit and 212 degrees Fahrenheit, for example, turns what was simply hot water into steam. The creation and use of steam to power engines, first in ships and later in trains, was the first significant leap in transportation in centuries.
Another example is in horse racing. Even if a horse comes in first place by photo finish, it wins ten times the prize money of the horse that comes in second.
In golf, the player who wins a tournament by a single stroke wins considerably more money than the player who comes in second. In a recent US Open, the first place winner collected $1.44 million and second place earned $865,000.
If a business can simply improve how it operates and what it does by, say, seven percent, some significant things will result.
A 3 percent improvement might not mean too much and perhaps might be too little to even undertake. It’s hard to get anyone excited about a 3 percent improvement. Five percent is better; but what about a 7 percent improvement; what would that mean?
Seven percent is a significant number. People can relate to this number; in many cultures it is considered a “lucky number.”
What if it were possible to increase the number of “A” clients by 7 percent, and stop doing business with the bottom 7 percent of your “C” clients? What would it mean to the future of the company?
What if the sales force were to increase the amount of time spent prospecting by 7 percent a week? How many more new potential clients could they see over the course of a year?
What if sales people could close just 7 percent more of the proposals they submit? What would that mean to commissions and commitment levels?
What if those in sales spent just 7 percent of their time each week learning to become better prospectors or closers?
What if the sales manager become 7 percent better in providing advice and coaching to subordinates?
What if prices were raised 7 percent on non-competitive products or services? What if your people were 7 percent more productive? What if chit-chat time were reduced by 7 percent? Would tasks be completed sooner, more efficiently? What if you reduced operating expenses by 7 percent?
What if better deals were negotiated with key vendors that resulted in a 7 percent price reduction or rebate? What would that mean to your margins?
What if travel expenses, utilities, office supplies, copying and printing costs, postage, insurance premiums, gasoline, telephone and discretionary costs were reduced by 7 percent?
Would anyone in the company be negatively impacted by such a small reduction?
What impact would that have on profitability? On company cash flow? On the company balance sheet?
What would a 7 percent of salary quarterly bonus program mean for an employee who has had their pay frozen or reduced? Would that increase their commitment and enthusiasm?
Can your organization become 7 percent better? It can be if you lead them to making it happen.
Ken Keller facilitates The Wise Owners Advisory Boards, bringing business owners together for education, sharing and on-going success. Contact him at KenKeller@SBCglobal.net. Keller’s column reflects his own views and not necessarily those of The Signal.

 

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