You may not be familiar with the amazing breakthrough one mass marketer of shampoo used to skyrocket sales. It wasn't from nanotechnology or landing a monster account with China. The breakthrough happened when the company added one word to the shampoo bottle:
"Lather, rinse ... repeat."
You and I might not be in the shampoo biz, but we still can benefit tremendously from the strategic use of the word "repeat." When you repeat something in your business, are you getting better at it, or simply repeating? Does your business look like an upward spiral or more like a dog chasing its tail?
If you want to leverage repetition to turbo-charge your business, consider the following six steps:
- Pick a worthy process to improve.
There's not much point in becoming world-class at something that plays a minor role in your business. Use the 80/20 rule to determine what one or two major actions in your business -- if repeated and improved -- could result in a big lift to your bottom line.
In my case, the decision was simple. I'm in the business of buying delinquent loans and then collecting on them with honesty and integrity. Real estate moguls often say that "You make your money when you buy." This is true for buying loans at a discount, and it's no doubt true for many other businesses that buy raw materials or assets. First, focus on your buying process -- or perhaps converting phone leads to paying customers -- and deal with the small fry later.
- Expect imperfection and execute anyway.
We've all heard of analysis paralysis. An even bigger problem that afflicts many businesses is "perfection paralysis." They don't follow the "ready, aim, fire" approach, but instead go "Ready, aim, aim, aim..."
I know the feeling. When I decided to buy my first loans and collect on them, I didn't have a clue about bill collecting (other than from the perspective of a delinquent borrower). I really needed to learn about this industry if I was to succeed. On the other hand, I was highly motivated to get out of the "aim...aim" rut because I was more than broke -- I was a million bucks in the hole.
Don't bet the farm on your early attempts, but don't delay, either: One quick, early action is worth a hundred timid measurements.
- Document and measure.
Here's the boring part. Nobody likes to write down processes and measure them because it seems like a waste of time -- a mere clerical function when you could be taking "real" action elsewhere.
Believe me when I tell you from 40 years of business experience that this boring clerical function can make you millions of dollars. When you lay down a process on paper, suddenly you begin to ask questions: Why do we do it this way? When did we change the procedure? Who's handling this part?; You might even step back and ask: What lunatic ever designed this mess?
It's not the writing down or measuring that will make you money, but instead the questions, answers and changes that will follow. In our case, we measured every one of the 4.5 million loans we settled with customers to see how our original pricing estimate matched up with the reality of what we collected on those loans. It's what allowed us to get so good that we eventually controlled 51% of all delinquent credit card debt in America.
- Trust but verify.
As I said, few companies take the time to document their processes. Even fewer will follow up to ensure the process on paper is what's being executed. Here you are, reading a report and drawing conclusions about sales of the new widget you shipped last month, but no one's had the nerve to tell you that a part was backordered, and Ralph in engineering decided to make a substitution.
Maybe Ralph was right to do so, but you're not right to draw any conclusions about that new widget. I once had a rude awakening when I discovered that several processes were not being followed and no one had informed me. For the following two weeks, my senior staff and I met for hours after 5 p.m. to walk through every line item of every key process in the company to make sure we were looking at the actual processes. Afterwards, I finally felt like I could trust the numbers again and make sound decisions.
- Learn and improve.
This is where you turn the dog-tail chasing into an upward spiral of profits. You know your processes, you're measuring them accurately and you're asking questions. Are you getting better in terms of speed, profit margins, safety or any other critical measures? If not, why not? Who knows the bottlenecks intimately and could suggest improvements? What new technology or approach might strengthen a weak link?
- Never stop.
The bad news is you can never really cross this item off your to-do list. The good news is you should never want to, because it's what separates the world-class companies from all the rest.
