Every day, companies operate in a state of either accumulated margin improvement or accumulated margin deterioration, as daily pressures constantly work to erode increasing profits.

By developing a ‘margin department mindset’ and leveraging the powerful software available today, companies can uncover previously unattainable margin improvements. The businesses of the future will have a dedicated data/margin specialist as a core part of their team structure.

• Each day is easier: What would you do with 5% more GP? Invest in sales, pay debt? Pay you team more. Simply put the more margin you have; the easier life is when running a business.
• Your company will be worth more: Every £100k of margin you free up the value of your business increases by £400k - £600k.
• It earns more than it costs by a ratio of 5x – 10x (Every £1,000 invested will return £5,000 – £10,000)
• Your future growth is more profitable.
  
  

1. Assign full responsibility for data management

This role is distinct from IT and finance. In many SMEs, data responsibilities are spread across various roles (Ops, Finance, MD), resulting in fragmented and underutilised data—often scattered across half-built Excel files on employees’ computers.

A major risk is assigning data collection and analysis to the wrong people, leading to unintentional bias. An impartial ‘data leader’ helps mitigate this issue and ensures data integrity.

2. Collect the uncollected

With exports and APIs, it’s easy to assume all data is accounted for, but the real margin magic lies in the ‘uncollected data.’ This could include tracking machine setup times or wastage. To fully realise your margin potential, it's essential to identify and capture missing data—remember, "rubbish in, rubbish out."

3. Appoint a dedicated margin advocate in every meeting

Instead of margin being an afterthought for multiple team members, designate one person whose sole responsibility is monitoring and improving margin. This ensures continuous focus and accountability.

4. Hold a dedicated margin-only meeting once a month

These monthly sessions should focus exclusively on margin-related discussions, including generating new margin experiments and ideas.

5. Avoid margin silos

Margin impacts every aspect of a business—from procurement to production to pricing. The margin leader must have a strong understanding of operations and commerce to drive meaningful improvements.

6. Wear the swag

It may sound trivial, but when I visit clients, I wear a "Margin" T-shirt. It immediately signals my purpose, sparking valuable conversations with teams across the business. The number of insights gained from these informal interactions is incredible.

7. Measure and act

The ‘margin department’ must deliver simple, action-driven BI reports. While tools like Power BI are incredibly powerful, excessive data noise can hinder decision-making.

8. Keep it simple and measure impact

While uncovering margin improvements can be complex, any proposed changes should be simple and measurable. The margin leader should always ask: “Will this make us more margin?” If the answer is yes, act on it.

Margin is a fundamental driver of business success, yet it is often underutilised as day-to-day operations (rightfully) take priority. However, the rewards of adopting a margin department mindset are substantial—both in today’s profits and tomorrow’s business valuation.

Our margin transformation theory is simple: when a business assigns someone solely responsible for improving margin, margin will improve.

“Marginal gains is not about making small changes and hoping they fly. Rather, it is about breaking down a big problem into small parts in order to rigorously establish what works and what doesn't.” (Matthew Syed)