The Bottom Line Paradigm

"Bottom Line" classically defined as the money left on hand after paying all business expenses, is a phrase used by business across the world to define and mark their arrival and exit from capital markets, a phrase which runs close to any CEO's heart, one that has been the stellar differentiating factor betwen successful corporates and not so successful ones. From Selling Bolts & Nuts to Assembling Cars to Setting up IT Systems, any business thrives hard to keep the "Bottom Line" intact and growing.

In the era of unyielding economic aggression, corporates have risen to great heights & fallen into deep trenches and most ususally the corporates which have fallen have failed to understand that being successful in the market is not a factor of just having a healthy bottom line but also the ways & means of making it healthy. Many successful corporates which change their strategies according to growing & changing market conditions have been near perfect in Innovation which is a direct co-relation to the Vision of that company's CEO.

Some of the predictable failures often seen are attributed to simple things like:

1. Inability to understand Globalization
2. Inability to foresee Market Conditions
3. Inability to understand defining forces of Market
4. Inability to understand competition landscape
5. Metrices to Govern growth Internaly

Recently I was attached to a firm which wanted to venture into a new service line of offering. The vision although was not shaped well, was present in pieces but the views expressed during my interview with their heads was pragmatic so to say. I was to take up an company wide integrating task of collating the common vision to take this new service offerings to our exisiting customer base and create a good platform from where we could make a big & sizeable Business Unit.

When I set upon the task, I was shocked to figure out that the company lacked basics of Management from simple Sales Lifecycle Management to Customer Delivery Management to Project Management. The exisiting revenues were coming purely on past year's merit and exisiting clients and was also diminishing year on year. Instead of focussing on expanding market, expanding service lines, the company was focused more on internal processes which over a period of time with a lack of automation became a burden than a neccesity. The sales team or the customer delivery team were tired of filing excel sheets of data which bore no value to a customer and it became a pure form of apeasing one's imediate boss which would reflect in the year end performance appraisal. By time, this company became too top heavy with designations amounting to "Vice Presidents" taking precedence over the actual ground reality of failing market share. Around this company, I saw the other competitors who started pretty much around the same time grow into large massive operations still not transfering their overhead costs to the cust0mers. What surprised me was that this company was in operation for last 20 years or more and clocked revenues in millions of US Dollars and there was completely no initiative to strengthen internal forces and blind disorientation towards moving & chaging market conditions.

The most immediate conclusion was that scalability within this company to lauch new service is going to be tough because they had no clue to understand where they were currently and how their revenue was split with regards to their exisiting service lines. This was an incredible situation as much as precarious one since any one failing service line in the market where we were strong can bring the whole company down within no time. Also, since we were focussed heavily on internal processes, we never set upon new client force and were banking heavily on set of selective clienetele which were also going to competition since the competition was both innovating and bringing overall cost down and transferring this benefit back to the customer.

There are strong learnings from this corporate:

1. Companies "Must" focus on Bottom Lines but never be a "Slave" to it
2. Companies must create a strong internal process to ensure tight integration with Customers
3. Gone are the Days of Customer Satisfaction, this is the age of "Customer Delight"
4. Keep "Market" & "Clients" as central to the strategy formulation and not "Internal People"
5. Innovation is key to any flourishing business
6. Money is always a by-product of a Good Service
7. Clients are Human Beings also, they have a passion towards good service providers

With the anguish and expectation, I gave this feedback to my reporting head and silently relinquished my responsibilities. Not all companies are successful, but the difference lies where how each one of them attempt to do so and certainly going behind just the "Bottom Lines" isnt certainly a good route.