Improving Profitability Using a Simple Diagnostic Tool

With the economic downturn, most practice groups are finding it harder to maintain margins, let alone increase them. Firms seem to be a bit stuck, not knowing what to do to tackle the problem.

Part of the reason this can be challenging is that the position across a typical firm can be complicated. For example, the levers to pull to improve the financial performance of a general commercial group where there’s high leverage might well be different to those for the high level specialists.

So here’s a proposed solution designed to help partners in each practice group agree the best way forward. It’s a diagnostic checklist combined with a ranking in terms of:

  • How easy would it be to implement the change – partners would be asked to score from ‘very easy’ to ‘very difficult’
  • What impact would the change have – partners would score from ‘big impact’ to ‘little impact’

To use this tool successfully, I would encourage firms to work with their in-house finance specialists. I see this topic as one of the useful agenda items you could have at a team meeting. The sharing of views that partners have could also provide a greater sense of teamwork.

Download the diagnostic proforma below.

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For more on this subject, read https://tonyreiss.com/2013/03/12/matter-profitability-plugging-that-leaking-sieve/

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One Response to Improving Profitability Using a Simple Diagnostic Tool

  1. Pingback: Managing Matters for Profit | Tony Reiss

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