zebra associates logo

    Has ‘trading’ become a dirty word?

    Mark Fells

    25 Oct 2023

    On a macro level, business is a pretty simple process, isn’t it? Money comes in, you have bills to pay, and what’s left is your bottom-line profit. Of course, you know this — it’s business 101. But somewhere along the line, ‘trading’ seems to have become a dirty word. Unsexy at best, and a dying discipline as businesses grow.

    When you take things back to basics, the act of trading is the essence of business. Small, agile businesses understand this simple truth. They’re ruthlessly efficient, with eyes on the next sale and knowing exactly how much money is in the business at any given time. Because they know that what’s left in the pot at the end of the month will pay the wages and allow them to grow.

    Where does it all go wrong for big businesses? And why do so few have a clear and active trading process?

    At Zebra, we believe there’s a lot to be said for business simplicity. So, we’ve shortlisted the most common symptoms to help you identify if your business has flaws in its trading process, and the key actions you can take to remedy them and focus your approach.

    Because when you get trading right, so many other things fall into place.

    How do I know if my business needs help?

    Sometimes the tell-tale signs of poor trading health can be subtle but deeply ingrained in your daily operations, masquerading as business as usual. These are some of the symptoms to look out for:

    No one knows the numbers

    Picture the scene: someone senior asks for a number, an average rate of return or a margin on a product — and no one can find it. The e-commerce team turns to the marketing team who turns to the finance team. Everyone stalls, in the hopes that someone has this elusive figure up their sleeve. But nobody does.

    You only review business quarterly

    Those figures your team didn’t know? They should be common knowledge and part of a free flow of information on a weekly basis. If they’re not, ask yourself why? It could well be the result of the pervasive Quarterly Business Review. If you’re not meeting weekly, you’re not meeting enough.

    Your business is slow to implement change

    Sluggish processes, business politics or insular team silos. If any of these sound familiar, then your organisation could be standing in the way of its own progress. Being slow to change means slow trading practices. You and your team need to be highly adaptable to market fluctuations, testing early and often and being one step ahead of your competitors. This means your business mindset must be hardwired for change.

    Your customer satisfaction is falling

    If your customers think that other brands or organisations are doing a better job than you, then you’re in trouble. To be trading-oriented, you need to be in your customers’ world at all times, and if their satisfaction is falling, your trading could be failing.

    There’s a lack of ownership in the business

    People aren’t showing up for meetings and there’s an air of indifference, as control and ownership falls by the wayside. Who is responsible for knowing the margin on your product? And what was the margin last quarter? If you find yourself asking these questions, you know there’s a problem.

    What causes poor trading practices?

    In our experience, when businesses fall down it’s down to one — or a combination — of these five scenarios that contribute to a lack of trading focus:

    Distance from the boss

    As you scale your business, you reach the limit of what you, as a single individual, can do. You build teams, you delegate and you push decisions down into the organisation — all smart calls in leadership.

    But more often than not, business leaders wrongly assume that the fundamentals of trading are fully understood and being managed - by someone. If this isn’t the case those slick trading processes you once had in place slowly begin to dilute through the organisation.

    Specialism silos

    As technology has expanded customer choice, availability and access, and as customer expectations continue to rise, businesses have added more specialisms into the mix.

    From Virtual Reality Architects to AI Ethicists, organisations are making room for new teams, job titles and divisions at a rapid rate to manage the volatile complexities of the landscape.

    Specialists tend to stay firmly within the lane of their niche, managing only the details of their subject and the experts they employ in these ever-growing silos. But trading is a generalist discipline. It’s the Jack of all trades of business. And because it touches every aspect of your organisation, it requires a holistic end-to-end view on how you operate.

    Organisation design

    Under the right organisation design — one that allows for top-to-bottom transparency, and where generalists are valued as much as specialists — distance from the boss and having a cohort of subject experts shouldn’t be a problem.

    But sometimes, more efficient structures such as the flat model can actually encourage silos and specialist behaviour. This is because greater responsibility and autonomy is naturally granted to individuals, and as a result, trading gets left behind.

    KPI ownership

    At Zebra, we see our fair share of reports in our clients’ businesses. On paper, the KPIs might look impressive, but so few of these reports have actually defined the right KPIs, in the right hierarchy, to hone in on trading.

    We’re not advocating for fewer KPIs here. But unless they ladder up to the basics of trading — a simple money in, money out, bottom-line equation — then a genuine focus on trading will be absent in your business.

    Even more crucial is ownership. Unless someone is responsible for a given number, then the trading process falls over. A client of ours summarises this approach nicely:

    • What did we see?
    • Why do we think it happened?
    • Who is going to do what differently as a result?

    Lack of process

    The previous four scenarios can be rescued to some extent by implementing a proper process. Get the right people into a room regularly, work out what needs to be achieved, give someone ownership and you can still trade very effectively.

    But all too often, we see ‘trading’ meetings slip to the junior reaches of the organisation or they happen far too infrequently to be worth any real value. The QBR must be abolished if you wish to trade successfully — you can’t allow your figures to fall through the cracks of every quarter.

    What can I do to fix it?

    If you can relate to these scenarios, all is not lost. Shifting deep-seated habits and driving cultural change can seem like a daunting task, but there are some easy steps you can take to realign your organisation into a trading-focused business:

    Build a KPI tree

    Not enough leaders connect their organisations to the important top-line metrics needed for growth. Start to build out a hierarchy of metrics that calibrate, in clear commercial terms, with the most important KPIs to ensure measured focus.

    Build ‘ghost’ metrics

    Our clients often tell us they can’t hold efficient trading meetings without the complete data set. Here at Zebra, we’re advocates for building out ‘ghost’ metrics into your trading report — the things you’d like to know, but don’t yet. Do that, and you’re good to go, you can begin the process of trading.

    Get a process started

    Process, process, process. It really is the backbone of commercial progress. Establish a weekly session, chaired by the most senior leaders in the business and attended by those who have the authority to make decisions. Build a picture with those incomplete metrics and ensure that your process has clear actions, measurements of those actions, and a method of reporting to see if those changes have made improvements.

    Ready to start trading effectively?

    Running a well-oiled trading business shouldn’t be a complex operation. Small cultural changes can spur huge shifts in your trading mentality, creating faster commercial decisions, which will generate real value to the bottom line where it was once unknowingly lost.

    Still not sure where to begin? At Zebra, we can support you in establishing new processes, building the right KPIs, and implementing test-and-learn practices, so you can really start to transform your business for tomorrow.

    Ready to realise the true commercial potential of digital for your business?

    Get in touch
    Twitter logoLinkedin logo