What is the most profitable product and how much revenue did it generate in the last financial year?
Why you need to know
It is incredibly important for HR to know and understand the company’s most profitable product(s), as you will need to be mindful of any impact that suggestions you make will have on the product or the way in which it is managed or run. Knowing not only what the product is, but also how much revenue it generates will help you understand what relative importance you should place in terms of your strategies and suggestions on the team that are responsible for delivering it.
Knowing what the most profitable product is will only be relevant to companies that are involved in providing products and services, but there will be equivalent key offerings that you should understand for your strategy if you work in the public or not-for-profit sectors.
It’s about much more than revenue. You also need to understand the strategy for that product or service going forward, who is responsible for it, who influences its development, and how it is delivered. You wouldn’t want to suggest something that might actually damage the way that the product is run, but this detail will help to put suggestions you are making in context and make sure they are informed.
This information will also help you to be strategic in the way you deliver your goals. For example, in terms of prioritising development, are you prioritising someone who is responsible for an important product over someone who is responsible for a less important one? The importance of succession planning will also be relative to the importance of the product so recruitment and retention strategies should be designed with this in mind.
If you understand the company’s products you will also be able to have useful conversations with the business. For example, when trying to engage them in conversation about strategy, this is something that is relevant to them and will help to unlock their thoughts about events that have happened or what support they need.
The way to discover this information is to ask for it. Talk to relevant people within the business, your sales people or those at the sharp end who deal with the company’s clients or customers as will people in finance. Look at the management accounts, as they will contain this information as well as the relative differences between products.
It is a crucial part of being a strategic business partner that you align your strategies and processes with the overall strategies of the business. Ultimately, strategies surrounding profitability and products are the wheels that run your business.
Jan Hills, director, HR with Guts