Achieving Optimization: A Time for Exploration and Discovery

SOURCE: Kay Sever | January 28, 2021

If I asked you to name a famous explorer, you might list names like Christopher Columbus, Marco Polo, Ferdinand Magellan, Admiral Byrd, maybe even Jacques Cousteau. What do all of these famous historical figures have in common?

1) They had a desire to find out what was in the “unknown”.

2) They did not know what they would discover during their journeys.

3) They had the courage to make the trip.

4) They collected evidence and wrote accounts to document what they discovered along the way.      

In 2021, few think that “exploration and discovery” could apply in the corporate world (except for mining companies that look for new mineral deposits). Physical assets and liabilities are represented on balance sheets; revenues collected and dollars spent to create income are measured and monitored. What could possibly be unknown? Surely all the dollars linked to a company’s financial success have been accounted for… or have they?        

Executives, management teams and decision-makers have always used actual and budget data to make decisions that affect performance, profit and organizational effectiveness. They believe these data-sets contain ALL the information they need to optimize performance and maximize profit.

What if I told you that the general ledger was designed to report ONLY the “net” result of what happens in a company (i.e., revenue collected and dollars spent)? Financial systems DO NOT INCLUDE “grossed-up” numbers related to a company’s operating potential or profit potential.

Operating/profit potential consists of:

1) The performance potential that your assets and people are capable of achieving.

2) The profit potential that you have paid for but not yet tapped into.

3) Unrecorded revenue losses and dollars that could have been saved due to operating strategies.

4) Missed profit linked to organizational weaknesses, including the way people work together.

Business leaders are UNAWARE that they have NO DATA linked to their company’s operating or profit potential. Without this data, management CANNOT convert profit potential to reported income. What does this mean for business leaders?

1) They are using only a portion of their company’s capabilities to generate results.

2) They DO NOT KNOW how many dollars they are leaving on the table.

3) They will spend money WHEN THEY DON’T NEED TO.

4) They will make decisions that create a RISK OF FINANCIAL LOSS.

When your team makes the decision to explore your hidden profit potential, there will be three areas of examine: asset potential, organizational potential and management system potential. All three areas of potential must be explored if you are serious about optimizing a site or the whole company.

FACT: Millions of dollars of potential profit could be waiting to be tapped by your leadership team.

Maybe it’s time for your management team to go “exploring”… maybe you should consider a voyage into the unknown portion of your company’s capabilities. Like the explorers of the past, your team must

1) Have the desire to find out what’s in your company’s “frontier of profit potential”.

2) Have the courage to learn about the money you are leaving on the table.

3) Accept your discoveries as opportunities, even if you are unhappy about what you have learned.   

4) Collect evidence and document what you discover along the way.     

Thought for the month: Millions of dollars of potential profit could be waiting to be tapped by your leadership team. You just need to make a decision to begin exploring…

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Kay Sever is an Expert on Achieving “Best Possible” Results. Kay helps executive and management teams tap their hidden profit potential and reach their optimization goals. She has developed a LIVESTREAM management training system for Optimization Management called MiningOpportunity – NO TRAVEL REQUIRED. See MiningOpportunity.com for her contact information and several training options for your team.

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Kay Sever
Kay Sever Author
P.O. Box 337 Gilbert, AZ USA 85299-0337

Kay has worked side by side with corporate and production sites in a management/leadership/consulting role for 35+ years. She helps management teams improve performance, profit, culture and change, but does it in a way that connects people and the corporate culture to their hidden potential. Kay helps companies move “beyond improvement” to a state of “sustained optimization”. With her guidance and the MiningOpportunity system, management teams can measure the losses caused by weaknesses in their current culture, shift to a Loss Reduction Culture to reduce the losses, and “manage” the gains from the new culture as a second income stream.