Strategy to Build a More Profitable Business

Want to run a more profitable business—without the guesswork? In this video, Steve shares the strategies high-performing companies use to boost profits and build long-term, sustainable growth.

You’ll learn how to align strategy with your goals, identify what’s really holding you back, and streamline operations to improve your margins. Whether you’re leading a growing business or managing a team, these practical tips will help you make smarter decisions and drive meaningful results.

If you're ready to stop spinning your wheels and start building a profit-focused business, this is your playbook.

TRANSCRIPT:

Running a business can be really challenging. Trust me, I've been there before. I've started multiple companies. I've turned a lot of organizations around and I've also helped businesses grow to the next level.

So I get it. If you're struggling and you're not achieving the results that you want to achieve, if you want to see higher profits, and if you want to stop dealing with cashflow issues, you're in the right place.

Because in this video, I'm going to explain the number one problem that I see across multiple organizations, across multiple industries, and of all different sizes. So whether you're small, medium, or large, this is a problem that is very pervasive.

Back in 2009, I was working for a Fortune 500 company. And this is when I had a giant light bulb moment. And let me explain what I saw and what I see to this day.

In companies, you have leadership. So I'll draw some people here. Yes, these are my stick figure people. So we have leadership on one side of the equation.

On the other side, you have FinOps — financial operations, the accounting, the finance department, the CFO. This is led by the CEO. This group is led by the CFO.

All right. So leadership, they have a mission that they want to accomplish. In FinOps, they have money.

I should probably draw some people over here so they're not lonely. I've been in this department before. Draw this green shade because that's how they're stereotyped — as these nerds doing debits and credits and whatever.

Okay. They're not really nerdy, but we'll just say these are accounting folks. I say they're nerdy because look, I'm very nerdy. I've spent a lot of time in financial models and spreadsheets and everything else.

Okay. So we have FinOps. They have these money objectives. Leadership, they have this mission objective.

In between the two, there's a giant gap. And this is what I realized. In most organizations, leadership over here, they oftentimes believe that strategy consists of mission, vision, and values, or they put together this plan.

In the plan, I'll draw kind of like a football play here. This plan has a list of all these initiatives or objectives that the company is going to go out and tackle for the year.

So they mistakenly believe that strategy is the same thing as a strategic plan. They're not.

A strategy is a set of interrelated choices that a company makes about where it's going to compete, how it's going to compete, and ultimately how it's going to win. Once a company has a strategy, then it puts in place a plan to go execute that strategy.

But too many companies mistakenly believe, number one, that their mission, vision, and values are enough to drive the money. Or they believe that having this plan with all these initiatives — but no strategy — will get them to this promised land with all this money. But that doesn't happen.

Over here on the FinOps side, we have all the accounting people. And like I said, I've been there multiple times before, and I'm going to draw this. This is the spreadsheet. And in the spreadsheet, there are all these numbers, right? All these formulas, all these calculations.

And FinOps says, look, we built a spreadsheet and we're going to see 10% growth because that's what leadership told us to do. They said, we're going to grow by 10%. So they built a model that shows how the company is going to earn 10%.

Okay. But just because they have a spreadsheet that shows how the company is going to earn greater profits, there's nothing in between here to take this plan — which is incomplete — and get it to this 10% result.

And this is the biggest problem that I see over and over and over again. And I built my entire career on this entire thesis here.

And the thesis is that strategy — when you have a strategy in the middle that defines your strategic problem, and then you outline your shared aspiration, your market focus and position, your competitive behavior, and the resources and returns that you expect to earn off this strategy, with the customer being at the very center — this is my picture of a strategy.

When you have a strategy in place, it serves as the bridge between the mission and the money. But this is what's missing oftentimes in organizations.

Now, once you have this strategy in place — and it takes work — and let me tell you, strategy is not a one-time event that you just schedule in the off season or at the beginning of the year to kick off the company in the right direction. Instead, strategy is a process.

It's a system that you follow in order to put in place strategic options, to overcome your strategic problem, to build competitive advantages, to enhance the customer experience, and to foster greater innovation. This right here is fundamental.

Once you have this in place, then at Coltivar, we use this process called IARs, which stands for Initiatives, Actions, and Results. You put these in place right here as part of a plan to go execute. And like I said, that's how you drive value. It's a process.

So every single month, we meet with our clients, we meet with the companies that we invest in, and we look at their strategy, we evaluate their IARs, we compare that to their financial reports, and we determine what's working and what's not working. And then we build, measure, and learn, and adjust. Build, measure, learn, and adjust.

And that's the whole process here that is missing in so many organizations. And that's why I am so passionate about this.

Strategy plus finance equals value.
And when you understand how the strategy right here is going to enable the company to achieve price premiums, cost and capital efficiencies, and strategic growth — when you have a good strategy, these will be the value drivers that are the result of the strategy — you will achieve greater free cash flow.

And free cash flow is what drives intrinsic value. And intrinsic value is the discounted value of all the future cash flow that a company is expected to earn over its remaining useful life.

And that's what strategy is all about. It's positioning your company uniquely in a manner where you could drive greater value to the customer, while also engaging in these value creation activities to increase free cash flow.

Like I said, this is the biggest problem that I see repeated over and over again in organizations. If you don't have this bridge between the mission and the money, you're just going to go out there and you're going to work harder.

You're going to try to put in place bonus structures to incentivize people to meet these numbers. But people are going to get really frustrated because there is no strategy for them to achieve these numbers.

Instead, it's just like — get out there, work harder — relying on sheer heroics and work ethic. But I can tell you that doesn't work. And that's why so many companies have high turnover.

But when you have a strategy in place that bridges the mission that the leaders are trying to achieve, then leadership will be happy and employees will be engaged. And they'll be happy because the company will be earning higher free cash flow, which allows them to reinvest back into the company and build a resilient, iconic organization.

This is the entire model that I use over and over again. And I thought this would be extremely helpful for you.

Let me ask you:
Do you have a strategy for your business based on what I explained here? I want to know. I want to hear from you.

So if you have a robust strategy that follows this methodology, type in yes in the comments box below. If not, type in no.

Also let me know what other types of content you're interested in so I can continue to deliver valuable information to you. I want to help you out and empower you to drive greater firm value in your organization.

All right, that's it. Be sure to subscribe so you get notified every time I drop a new video like this as well.

In the meantime, take care of yourself.
Cheers.