Monday, May 18, 2009

CEO's Less is the new More

Every day we hear about down-sizings, lay-offs and reductions but are they really all that bad? In good economic times, an enterprise can get too large, too cumbersome and have too much bureaucracy. Now is good time to ask, “How can we do less and still win?” This economy may force your management team put a tough lens on the productivity of the work we do to improve ROI.

Clearly our auto manufacturers are in the midst of media crisis headlines.
General Motors announced the closing of 1,100 dealer locations and Chrysler is announcing the closing of about 1,900. But is that really a bad thing? Do consumers really need so much choice? The proliferation of choice may sound good but it can confuse the customers.

Here are some times to “skinny-down” in this economy:

1. Define your core competency and do everything you can to protect it. Insure the resources and competencies of your firm are intact so you can grow profitably when the economic downturn turns-around.

2. Review all of your systems and processes. Ensure the ones in place are effective, needed and critical to getting high quality products out the door profitably.

3. Take work out. Do you really need all those reports? Jack Welch created the famous “
GE Work-Out Program” in his pursuit to make GE a better company. The goal of the Work-Out program was to "clean up" GE, to make workers more productive and processes simpler and more clear-cut. "Work-Out" was also designed to reduce, and ultimately eliminate all of the wasted hours and energy that prevented GE from performing day-to-day operations.

4. Offer less choice to your customers. Food companies create value through three business levers: improving unit margins, volume growth, or market share. Too often,
product proliferation doesn't help any of these. The number of new products introduced in 1980 almost doubled the number introduced in 1970 --1,030 intros in 1970, 2,016 in 1980. The number of new products introduced in 1990 (9,192) was more than three and a half times the 1980 total and almost nine times the 1970 total!

There are many benefits to a lighter enterprise. Being less cumbersome can free your employees to think of new ideas, work on teams more productively and be more customer-centric. Less is the new more.

What are you doing to take work out, trim down and streamline so you can be ready for growth? Let us know. Send your comments and thoughts.

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