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Profitability for your competitiveness

Profitability is more than just a key figure - it is an attitude that shapes every decision. It is the key to the long-term competitiveness of companies. It ensures that resources are deployed in a targeted manner where they bring the greatest benefit and at the same time creates space for innovation and growth. It strengthens the market position, increases flexibility in the face of change and thus forms the foundation for a robust, future-proof organization.

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Why is profitability important for companies?

Profitability is crucial for the long-term success and competitiveness of an organization. Only if the income is higher than the expenses does it have the means to fulfill its tasks sustainably and invest in the future. Profitability strengthens organizations by deploying resources where they bring the greatest benefit. An example: In a development portfolio, it is important to decide which topics create the greatest added value in relation to the effort required so that the organization works on the right priorities when resources are scarce.

Profitability creates room for innovation and growth. It offers financial leeway to react quickly and specifically to market changes - without jeopardizing delivery capability or quality. It offers security and development opportunities not only to the organization, but also to its employees.

What does profitablity mean?

Cost-effectiveness is more than just a key figure that puts effort and added value in relation to each other. It is an attitude in which every decision is examined in terms of its cost-effectiveness. This attitude is reflected in the prioritization of topics and the targeted use of resources - at every level, for example in the portfolio or project.

Economy means keeping effectiveness and efficiency in balance. Effectiveness means prioritizing the right issues, while efficiency reduces waste, e.g. by using methods such as Leanthat eliminate unnecessary process steps, or Agilewhich enables quick adjustments.

Profitability creates the basis for sustainable competitiveness by providing room for innovation and growth, controlling costs and ensuring clear priorities for employees.

How do you achieve profitability?

Profitability is achieved when companies allocate their resources where they bring the greatest benefit and at the same time ensure their long-term stability and ability to innovate. Five key levers are decisive for this:

Strategic resilience: An economic organization builds buffers and flexibility into its structures in order to remain capable of acting even in times of crisis or market changes. This is achieved through robust processes, clear priorities and smart allocation of resources.
Sustainability: Profitability means operating sustainably - both financially and in terms of personnel. Long-term investments in employee qualifications, technology and stable business models ensure success for years to come.
Promoting innovation: An efficient company creates scope for innovation by eliminating waste and creating efficient structures. This allows new ideas to be developed without jeopardizing the cost framework or operational processes.
Competitive advantages: Through the targeted review and optimization of processes and costs, companies can react more quickly to market opportunities and thus stay one step ahead of the competition. Agile and lean principles are important tools here.
Measurability and control: Efficiency requires clear key figures and continuous monitoring. Companies that regularly review their processes, costs and results recognize potential for improvement at an early stage and stay on course.

A short checklist: How are you doing in terms of profitability?

Does your organization have a clear stance on profitability that encourages all employees to take economic aspects into account when making decisions?
Are decisions systematically checked for their cost-effectiveness and the balance between efficiency (use of resources) and effectiveness (achievement of objectives)?
Are there clearly defined and prioritized goals at all levels?
Are data and key figures used to check profitability and steer decisions?
Are employees empowered and enabled to make decentralized economic decisions - supported by key figures, transparency and economic decision-making models?
Do you use key figures and methods such as lean and agile to improve the efficiency of your work, optimize processes and react flexibly to market changes?
Use methods such as Kanban or Gantt to organize work and track and control the use of resources?
Do you create space for innovation and growth through economic activity and make targeted investments in future-oriented technologies or skills?
Does your approach take into account not only economic, but also ecological and social sustainability?

First steps towards a profitable organization

The path to an efficient organization begins with a thorough analysis of the actual use of resources. Check where time, budget and personnel are used inefficiently in your company and identify the biggest drivers of costs and waste. On this basis, you should define clear, measurable goals - be it reducing costs, increasing efficiency or creating scope for innovation. Focus initially on the core processes that have the greatest impact on your competitiveness, such as product development, production or sales, and optimize these in a targeted manner. Initial agile methods can help you to react flexibly to changes and implement gradual improvements. Small, iterative results minimize risks and make progress quickly visible. In addition, you should establish key figures and monitoring to make the progress of your profitability initiatives transparent and secure them in the long term.

With these steps, you lay the foundation for an organization that works efficiently and effectively and is flexible enough to react to changes in the market environment.

Our range of training courses for your profitability

With an assessment, we support you in objectively evaluating the efficiency of your organization. Together, we identify strengths, weaknesses and specific measures to further develop your profitability in a targeted manner. Based on this, we work with you to create a roadmap to successfully implement the proposed improvements.

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Lean: working with the customer at the center

Lean is known from production. In the meantime, lean has long since arrived in knowledge work - and, paired with agility, is one of the basic building blocks of New Work. Agility is inconceivable without lean and digitalization is inconceivable without agility.

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