Bertrand Duperrin's Library tagged costcutting → View Popular, Search in Google

Feb

2012

Social Means Freedom, for Better or for Worse

"A Stanford Professor quit his job. But he doesn't plan to go to another prestigious university. Nope. He, like others, has discovered the power of teaching online; in his case, he reached 160,000 students in a single online course on artificial intelligence. This is more than a story of online learning or mass dissemination. It proves a point: What once required a badge and a title within a centralized organization no longer does.

The implications for global education are huge, of course. And that would be interesting enough. But there are also implications for organizational design and talent management for firms of all sizes. "

blogs.hbr.org/...l_means_freedom_for_bette.html

- Preview

organization organizationaldesign talentmanagement costcutting sharedpurpose alignment

Nimbleness model #1: Staffing with "concentric circles."
Instead of organizing in a hierarchical way that focuses on "getting the right people on the bus," this model is about building concentric circles of talent that flow and resize as needed.
7 more annotation(s)...
- A construct of circles rather than hierarchies allows an organization to tap into the so-called "freelance nation," the global talent pool of the creative class.
- Nimbleness model #2: Customer service outside the perimeter.
- McAfee did something transformative to their service exchange by using social. McAfee formed a strong bond of commitment with the hundreds of unpaid technical experts in the larger marketplace who know (and like) McAfee's platform of solutions. They invited these "McAfee Maniacs" to participate in much of McAfee's web-based technical support. The most prolific Maniacs posted responses numbering in the thousands.
- first line of defense of loyal, committed experts cooperating in the viability of the platform. Customer satisfaction didn't decline. There is probably no better defense shield than passionate market experts co-opted with a company — and for free.
- he point of these examples is what these organizations got, not what they cut. They gained fluidity and flexibility — important to the demands of the social era. But they also got, in the case of Singularity, the leading edge content people to come together to teach current ideas to what they believe are change-agents who will make the world better.
- When you have shared purpose, it doesn't matter how many people work "in the company" and how many work "with" the company or how many are serving as an army of volunteers who want to advance the mission.
- But they will need an extremely clear purpose, and shared, decentralized power throughout. When a clear purpose is coupled with shared power, people can self-organize to reach the goal.

Feb

2012

Edge Perspectives with John Hagel: Pull Platforms for Performance

"We live in a world of mounting performance pressure. Our Shift Index reveals that return on assets for all public companies in the US has eroded by 75% since 1965. Companies clearly are failing to respond effectively to these mounting pressures. If we hope to turn this around, we need to step back and take a systematic look at the performance levers that drive these results and question the approaches of the past. "

edgeperspectives.typepad.com/...platforms-for-performance.html

- Preview

performance measurement metrics crm socialcrm profit pull KPIs innovation loyalty customerloyalty pareto costs costcutting

Most businesses can be understood as bundle of three core operating processes, each driven by a unique performance lever. These three operating processes are: customer relationship management, product innovation and commercialization and infrastructure operation
In most industries, customer loyalty is eroding, leading to a significant reduction of the average life of a customer. To make matters worse, margins are eroding as well, diminishing the profit generated per year of a customer relationship. In many industries, the cost of customer acquisition is also rising
11 more annotation(s)...
- Brand used to help a lot in charging a price premium, but the brand premiums are rapidly eroding in most industries. As if that is not bad enough, the cost of developing new products and services is also increasing in many industries.
- Margin pressure reduces profit generated per year, accelerating technology and consumer preference changes diminish the average years of asset viability and cost of building/acquiring assets tends to increase.
- it's hard to manage these levers, if they are not even measured. I continue to be amazed at the number of companies that have yet to even systematically measure and monitor these levers
- In fact, the Pareto principle is often missed by companies – 20% of the customers, products and facilities usually generate 80% of the profits. But which 20%? Few companies can answer this with any assurance or precision.
- One way to start improving performance dramatically is to ask two questions. First, what are the characteristics of the 20% that generate the 80% of the profitability and is there anything that can be done to increase the share of these highly profitable parts of the business? Second, is there a compelling reason to retain the other 80% of customers, products and facilities given their low contribution to profitability and, if so, what can be done to increase their profit contribution?
- Measurement is just the beginning. The key is: what actions can managers take to improve the overall performance of these operating levers? Unfortunately, the prevalent instinct of executives as they focus on these operating levers is to cut costs.
- cutting costs is a diminishing returns proposition. The more costs are cut, the harder and harder it will be to achieve the next increment of cost reduction.
- What if we viewed the ideal customer relationship as one where I, the vendor, seek to build an expanding platform to help customers connect more effectively with the resources that are most valuable to them individually?
- What if we began to re-conceive products and services as platforms that would invite and support third parties to add customized modules and extensions to the functionality available in the core platform?
- we might explore ways to make it available to third parties so that we can increase utilization of the resource and generate more profitability from our investment.
- I explored this option in a Harvard Business Review article – Unbundling the Corporation – which has gotten a lot of attention from executives around the world. The article had a provocative proposition – companies will ultimately have to choose one of three business types to focus on and shed the other two.

Jan

2012

The Old Solutions Have Become the New Problems - BusinessWeek

"A former Harvard Business School professor says companies must commit to 'I-space' and collaboration, not financialization and administration "

www.businessweek.com/...ca2009072_489734.htm

- Preview

collaboration financialization administration capitalism trust growth costcutting

we managed to produce a generation of managers and business professionals that is deeply mistrusted and despised by a majority of people in our society and around the world.
Some 77% of Americans say they refuse to buy products or services from a company they distrust,
4 more annotation(s)...
- Many companies reacted to this decline by finding new ways to cut costs.
- Under the flag of "shareholder value," (a concept honed by HBS faculty and glorified in many of our courses), firms also turned to "financialization," another specialty of the curriculum. Since the 1980s, goods-producing firms have made more of their revenue and profits from finance than from selling their products.
- Historians observe that financialization is a typical indicator of economic decline
- As Harvard—along with many other business schools—now tries to understand what went wrong, it's essential that everyone involved in business learns how to be the future. There are turning points in history when it's time to salvage what is valuable from the old and put our energies into constructing a new model based on new rules

Sep

2011

Achieving Sustained Cost Reduction

"When companies go through boom times, they quite naturally take their eyes off costs. But to maintain profits when revenue goes downhill, most CEOs call for cost cutting. The scalpel comes out, and while it's necessary, it usually comes at a huge cost to employee morale."

blogs.hbr.org/...ving_sustained_cost_reduc.html

- Preview

costs costsavings costreduction costcutting sixsigma businessprocess organization finance

Big rounds of layoffs demoralize employees, drive out critical expertise, and put the organization on a downward spiral. Going through the traumatic experience of seeing friends leave and fearing for their jobs, few remaining employees believe their hard work and strong performance will save them.
More insidiously, right sizing departmental silos usually doesn't affect the cost structure permanently. Because the underlying work hasn't gone away, the fat creeps back. The cost reductions last only until everyone goes back to their old ways in a few years.
3 more annotation(s)...
- Companies launch process improvement projects with hard financial targets. These projects get costs out, but a number of people have told me that when the project leaders ("Black Belts") leave and move on to their next project, the costs creep back. The quoted financial savings from Six Sigma projects, while valid, aren't having long-term effects on their cost structure.
- To perennially keep costs down companies need to change the way that work is accomplished — the business processes of the organization. By continually focusing on improving the experiences that customers have with the organization, the quality of offerings, and the time it takes to bring them to market, they will get cost effectiveness as a byproduct
- The financial spreadsheet has become the focal point of top management's attention — so much so that CEOs now view the organization almost entirely through the lens of financial (and other) quantities, nearly oblivious to the concrete operations from which the financial results emerge