For Southwest Airlines, that X was profit per plane. Their strategy focused on maximizing how profitably each aircraft operated, through fast turnarounds, high utilization, and simple operations. Every additional plane then scaled profitability, not just revenue.
You could be In Perth, Johannesburg or London, your X might be:
- Profit per project
- Profit per client
- Profit per location
- Profit per sales rep
The right X depends on your business model:
- Products – Profit per product line or SKU
- Services – Profit per customer or contract or location
- Hybrid – Profit per sales rep or region
Why profit-based?
Because it forces you to optimize pricing, costs, and value simultaneously.
An X metric aligns the whole team. Instead of chasing sales, everyone focuses on deals that move the profit needle.
This turns every meeting, decision, and priority toward the same economic north star.
From X to BHAG: Make Growth Measurable
In the Southwest example they focused on profit per plane as their key economic driver. By maximizing profitability per aircraft, every additional plane scaled profit, not just revenue.
For a Perth scale-up, you can link your BHAG to your Profit per X metric. For example, imagine a software (SaaS) business:
- Your X = Profit per customer (subscription)
- Current profit = $500 per customer per month
- BHAG = $12 million profit per year in 10 years or to have 2000 monthly subscribers in years
Now work backwards:
$12,000,000 per year ÷ $500 per month = 2,000 customers
That’s 2,000 profitable customers to hit your BHAG.
Suddenly the strategy becomes clearer:
- Acquire more customers
- Increase profit per customer (pricing, upsell, efficiency)
- Reduce churn and retain customers longer
- Improve onboarding and customer success
Every new customer moves you closer to the BHAG.
This approach makes your BHAG:
- Measurable
- Achievable (though ambitious)
- Aligned to profitability
Instead of chasing revenue, you’re building a profit-driven growth engine, where each new customer meaningfully moves the business forward.
Why This Works
- Clarity: Every person knows the key metric.
- Unity: Sales, product, marketing and finance all work toward the same level.
- Accountability: You can score progress in real time.
Instead of fuzzy “grow revenue 20%,” you get concrete signals. Every time profit-per-X rises, you’re on track for the big goal.
Putting Profit per X Into Practice (90-Day Test)
Instead of starting with a BHAG, treat Profit per X as a hypothesis to test over 90 days.
Does this metric drive the right behaviours and improve profitability?
Step 1: Choose Your Profit per X (Hypothesis)
Pick one metric you believe best represents how your business makes money:
Examples:
- Profit per customer
- Profit per project
- Profit per contract
- Profit per location
- Profit per product
This is your working hypothesis, not a permanent decision.
Step 2: Calculate Your Current Baseline
Use your finance data from Xero or QuickBooks and calculate:
- Current Profit per X
- Top 20% vs bottom 20%
- Where you make the most profit
This often reveals immediate insights:
- Some customers are far more profitable
- Some services destroy margin
- Some deals should be avoided
Step 3: Ask your leadership team
“If we improved Profit per X by 20%, what would we do differently?”
Look for changes in:
- Pricing
- Customer selection
- Cost control
- Service delivery
- Sales behaviour
If the answers make strategic sense, you’re likely using the right X.
Step 4: Track for 90 Days
Add Profit per X to your weekly leadership meeting:
Track:
- Profit per X trend
- Key drivers
- Wins and losses
Ask weekly:
- Are we making better decisions?
- Are margins improving?
- Are we focusing on the right customers?
Step 5: Evaluate After 90 Days
You’re looking for three signs you’ve chosen the right X:
1. It Changes Behaviour
Teams start asking:
- Is this customer profitable?
- Should we price differently?
- Should we say no to this work?
2. It Improves Decision-Making
Leaders become clearer on:
- Which customers to target
- Where to invest
- What to stop doing
3. Profit Improves (Not Just Revenue)
Revenue alone can mislead.
The right Profit per X should improve overall profitability.
If It Doesn’t Work, Change It:
If after 90 days:
- It creates confusion
- Doesn’t change behaviour
- Doesn’t improve margins
Choose a different X and test again.
The Test of a Good Profit per X
A strong Profit per X should:
- Be simple to calculate
- Drive better decisions
- Align the team
- Improve profitability
If it does these things , you’ve found your economic engine.