Divide Products/Services into Three Groups
Practice “Corporate Triage” on your company, and your products and services, on a regular basis. The concept of triage comes from World War I. During the battles on the western front, there were so many wounded that the medical corps could not treat them all. There were not enough doctors and nurses. As a result, they began dividing the rooms into three groups. The first group was made up of the wounded soldiers who would die in any case, whether or not they got medical attention or not. They were put aside and made comfortable.
The second group was the group that would survive in any case, whether or not they got medical attention, because they had light wounds. These were put aside and treated quickly.
The third group of wounded was the group that would survive only if they got immediate medical attention. This is where the doctors and nurses focused all of their energies, to save those would die in the absence of treatment.
In your business, you can apply the idea of corporate triage to your products and services. They can be divided into three groups: Winners, Survivors and Losers.
Sometimes they are called “Cash Cows, Stars and Dogs.” Which of your products and your services are your winners? These are the ones that sell well, that are profitable, that generate steady, predictable cash flow, and for which your company is known. These are products and services that you take excellent care of, but which do not require immediate or emergency attention.
What are the products and services that have great potential? If you spend time on these products and services, in sales and marketing, or if you redesign or repackage them, you can turn them into winners in the market. These are the products and services that require immediate attention, and the best energies of your most talented people.
The third group are your losers, or your “dogs.” No matter how much effort you put into marketing and selling them, no matter how you repackage them or reformulate them, they are still not making much of an impression in the marketplace. They are a drain on funds and on time and energies of your key people. These are the products and services that will die sooner or later because, for whatever reason, the market doesn’t want them.
Focus Where Excellent Results Are Possible
In setting priorities for your business, your winners represent the top 20% of your business activities. You must never take them for granted. You must do everything possible to upgrade and improve them and assure that they continue to be good sellers and generators of cash.
Your potential “stars” are the products that have the potential of becoming big sellers if you spend enough time, attention and money on them. They are your potential winners for the future. Investing time and money in these products and services is a high priority.
The products and services that will die anyway, no matter how much time or money you invest in them, become your “posteriorities.” Especially in times of reduced markets and profitability, you must have the courage and decisiveness to accept that, although it seemed like a good idea at the time, this product or service does not justify the expenditures necessary to make it successful. It should be discontinued or abandoned so you can devote your energies to those products and services that represent the future of the business and the cash flow of tomorrow.