I had lunch with a gentleman the other day who told me that his company used an outside trainer whose message was always the same. He said the “consultant” pounded the same message meeting after meeting and over and over again. “GMROI (Gross Margin Return on Investment), ROA (Return on Asset): they need to improve, raise these two indicators and you will be more profitable.” Well duh!
It is important to realize that these types of measures are simply measures of success and not steps to success. It’s a critical difference and the message from this trainer was something like a Dr. saying, “You have a fever. Cool down!” or “Your white blood cell count is high, make it lower.” That is not what a doctor would do, rather he would locate the cause of the fever or high blood count and then prescribe medication and a course of action to fix those ailments. So, to complete my analogy, GMROI and ROA can help diagnose illnesses in your business, but they can’t fix them.
Fixing a failing business requires going back to basics. It requires looking at every element… even the little things… no, especially the little things. Bigger things are likely to take care of themselves because, as a busy manager, that’s probably what you focus on. Huge differences in measuring success, measures like GMROI and ROA are achieved by managing the small things.
Here’s a little exercise to try when you walk into your store in the morning to help you get your focus back on the little things. Spend some time studying the exterior of your building. What do you tell your client? Does it say you succeed or do you struggle? Look at the lobby. What do you tell your client? Does your cleanliness and order say that you are proud of your store or not? Now walk inside. What does your product selection, lighting, and presentation tell your customers? Do these elements communicate that you are eager to meet the needs of your customers or not? Watch your employees. Are their interactions consistent with the level of customer service you would like to receive if you were a customer at your store?
I guess my point is simple. Stop worrying about the destination and focus on the journey. The measures of success, GMROI and ROA, are targets. The small incremental steps to success are the journey. You will never get to your desired destination unless you focus on how to get there.