​​How to Navigate the Path to Profitability​

In our recent roundtable discussion, led by Chris Hennessey, Enterprise Finance Strategist at Amazon Web Services (AWS) and former Technology CFO at Capital One, C-suite executives from across the cloud technology sector explored the need to balance expansion with profitability to run a successful business.

From the benefits and “watchouts” of generative AI on working efficiencies, to innovation strategies and their impact on business-as-usual operations, we explored the challenges leaders are grappling with to get the most from their teams and their technology stacks. Read on to discover the key insights from the conversation.

Culture and People readiness is key

Honesty regarding the readiness of the organisation to undergo a digital transformation is essential to the project's chances of success. People and culture will ultimately determine the outcomes, and ensuring detailed preparation is undertaken to encourage buy-in and understand where upskilling will be required will mitigate risks.

Think big, start small

Leaders who adopt visionary thinking and a big picture mindset can help businesses establish clear goals and a direction of travel. However, setting out ambitious large-scale business improvements may lead to teams feeling overwhelmed and unsettled. Effective business leaders understand the principle of atomic habits: that big change is effected through small incremental, regular optimisations.

Adopt a customer-first mindset

Digital transformation projects are often perceived as urgent priorities at board level to ensure businesses keep up with competitors and market movements.

While funnelling investment into technological innovation may ultimately improve long-term customer experience, it is important for boards to remain attuned to longstanding, unaddressed legacy issues in their infrastructures.

Staying close to customer pain points can help leaders plan the cadence of their technological and software investments to ensure they are as valuable as possible to clients and prospects.

Lead with transparency

Often, there is a disconnect between the strategic business conversations happening at board level and the perception of business decisions amongst staff at an operational level. When senior executives have oversight of resource struggles or limited budgets, open communication with team members outlining the current situation and the planned strategy to overcome these challenges builds employees’ trust, empathy and investment in the business mission.

Consider the metrics that matter

Traditional metrics like EBITDA and cashflow are essential in helping leaders understand business performance and forecast for areas of future investment and development. But applying a laser focus to microeconomics within the business can reap sizeable cost efficiencies. Boards should look at indicators such as the IT efficiency ratio in the business and how it evolves over time, and the cost per transaction or customer acquisition cost to identify where in the sales funnel improvements can be made.

Empower teams through failure

In high-growth environments such as scale-ups, the pace of change is rapid. Encouraging people to fail fast and question existing process can yield drastic performance improvements. To instil this mindset effectively, leaders must implement rigorous scenario planning processes. These processes give teams the ability to map out potential business implications of different strategies, to truly understand the potential impact of projects, and allow the board to plan accordingly for the potential outcomes. Regardless of which route the business decides to take, teams are better prepared for the milestones and challenges to achieving their desired outcomes.

At Odgers Berndtson, we work with organisations at all stages of maturity to find and embed the right leadership teams with the expertise to drive profits while overseeing digital transformation projects.

Get in touch. Follow the links below to discover more, or contact our dedicated leadership experts from your local Odgers Berndtson office here.