Editor | On 05, Jan 2010
We head into 2010 with uncertainty. Things look like they may be turning up a little, but many people are still cautious, considering all the financial turbulence. In times like this, it’s always best to fall back on things and principles we know will stand the test of time. Let’s review a few of them as we plan our business and innovation strategy for 2010:
- Cost reduction pressures will not cease, especially with continued globalization of business and technology. So how do we decrease costs? We lower the price of what we pay for raw materials, capital, and people. We beat up on our suppliers. Incremental improvements in these areas come from renegotiating contracts, changing delivery times, reducing overtime, automating–all the things that have been known for years and everyone else knows too. So what can you do that is special? Don’t reduce costs–eliminate them! How do you do that? By not using the materials or resources at all. Now I don’t mean brutal downsizings–there has been enough dumb non-innovative practice of that. I mean the scientific concept of “trimming.” Black and Decker uses the empty volume in a paint stick to help people avoid paying for buckets and paint pans, while at the same time not paying for wood or aluminum volume not needed. CNN uses I Reporters to save all the time of jetting around their reporters around the country and gets the news faster and at NO cost! Put the toothpaste in the handle of the toothbrush–save the plastic as well as the cost to the consumer of buying a large tube they won’t finish in a year’s time. Email your bills–don’t spend postage. Get rid of the tire–use the Tweel (R)! This is downsizing done with logic and science. It may or may not reduce people costs, but it sure opens the door for patentable products, margin improvement, and increased appreciation by your customers.
- Keep from being “trimmed.” Your customers may/should be doing the same thing. So what are you doing to help them get there? How can you reduce their costs, not just yours? How could the function performed by your product be done in a way that doesn’t use your product? Think about that before they do. This may force a hard decision about what business you’re in, an acquisition that may be needed, or a new approach to your business. If you don’t do it, someone else will. Be first to figure out how the function your product performs can be done without it. This is very hard business strategy thinking but it’s essential for survival in these times. Don’t spend time working on a better “non-spilling” paint pan–it’s not going to be needed.
- We’ve been brutal with people and their loyalty. How are you going to get it back? How do you change the culture and memory from “shut up and do as you’re told or you won’t have a job” to “we really need you and your input and ideas”.
- We’ve written columns about style differences in people. We use all kinds of psychological assessment tools but we really don’t USE them. They are discussed and the paperwork stored in a drawer somewhere.We put teams together without any thought to its composition except for the titles and backgrounds of the people. They are asked to work on problem 1. But problem 2 (how the team “gets along”) is swept under the table and the problem 2 energy saps that necessary to deal with problem 1. People have different styles of relating as well as problem solving that are very hard wired. Measuring these and making sure that the composition and dynamics of the team are critical to success. Make this the year that this issue comes out in the open and is dealt with pro-actively.
- Globalization pressures continue to increase. Inventors are figuring out how to deliver PCs and drinking water to third world countries in ways we have never thought of in the West. Potable water is delivered by sucking through a straw with carbon/other adsorbent materials embedded. No central drinking water facility. How much money does that save? What if these approaches are modified and scalable to other situations? Maybe we can learn from these approaches.
- Egos are still with us. Make this the year you stop using acronyms and jargon to discuss your problems and make them sound fancy, unique, and sophisticated to any one who does not know the special language. Let your hair down and talk to a sixth grader about your problem. Then you’ll find out that your problem is not all that special and that video games are the same as air traffic control systems, dissolving heart stents are the same as decomposing garbage bags, and high precision grinding diamond dust generation is the same as blowing the stems out of peppers.