OMIGOD! We’re a Non-Profit!

They didn’t actually say that, but I could read their minds….  

We were in a remote session with the leadership team of a client this past fall.  We were in the third of three sessions of a Remote Retreat (The Delta Variant forced us into doing the quarterly planning session this way, instead of in person. Damn the torpedoes, full speed ahead!).  

The team leader had just put up a slide that was a combination bar graph and linear graphs that showed the division’s revenue, gross profits, and net profits over the past seven years. The new CFO of the company created it and walked the team through the graphs. 

He didn’t need to. This is a team full of engineers. They are good at reading graphs. It illustrated quite clearly well that, over those years, revenue and gross profit went up and down, but the net profit had remained close to zero the entire time. 

Silence for a few moments. But even on zoom, I could read their faces. Shock, surprise, and ultimately discomfort about the fact that, although working hard and producing great outcomes for their satisfied customers, all was for nought.  They had not been able to drop any profits to the bottom line. They were a non-profit organization, and they weren’t happy about it.  

They got focused, and they got to work. They committed to turning this around.  

At our end of the year session, which was in person, we plotted out our course for the new year. In addition, we set a rock for the first quarter to develop a dashboard that would create real time awareness of the profitability of each customer project that rolled into departmental and the division wide profitability.  

Over those years they had measured their work with a metric that “baked in” all the expenses and revenue, so that if the metric was achieved, profits would take care of itself. It wasn’t working. 

The graphic, although difficult to stomach, created commitment, motivation, and alignment. They decided they want to win this game going forward. They are engineers. They will solve this puzzle. They are acting like owners going forward, too. 

How do you convey real time profitability to your team? What kind of dashboard do you have in place to do this? What help do you need to make sure your organization doesn't also become a non-profit?  

How can I be of assistance?