When the time comes to make tough decisions about what to do in your business, it can be helpful to keep one principle in mind as you work through the challenges you may be facing. What is your business great at? Not all of the things your business may be good at but the single activity that your business does better than anyone else in the market? If that question makes you uncomfortable you now have a starting point for figuring out what to work on in your business to get a different result. If that question is easily answered you now have a starting point for figuring out how to double down or leverage the strengths your business has to change its circumstances.
Notwithstanding Kohl’s was able to exceed the earnings expectations the market had for it, its year over year metrics, such as same stores sales and net income, were flat for the last quarter. Of the three reasons given, Kohl’s attributed their lack of results to their women’s department, weakness in their home category and lower gross margins due to promotional costs that did not produce the sales needed. There is a new leadership team that has been put in place to turnaround the women’s department by leveraging the brands that are working and phasing out brands that are not working. A new merchandising structure will help with inventory management and reduce the number of choices customers have which should provide a greater sales result.
You may believe your business is good at many things but being good means average margins and average margins means that when times are tough your business will suffer. You must focus and lead your team to be great at something that can be used as platform to increase the overall performance of the business and the tasks that it completes. Being great means having great margins and great margins means that your business will be able to withstand market changes better than its competitors and seize opportunities when they arise.