Here is our continuing list of suggested New Year resolutions on Improving Profits so that you don’t find yourself doing the same things as you did last year and expecting different results.
Resolve to Redefine Your Supply Chain from the Outside In
The only way you’re going to be able to create successful “Mafia offers” (see Part 1), is if you really start listening to your customers.
It’s time to forget what you think you know about your industry and your customers.
Real innovation means taking a fresh, new look at what your customers really need.
In many cases, they need exactly the same product you are supplying to them today, but they need it delivered in an entirely different way to help them be more successful.
Redefining your supply chain may mean “listening to your customers” by finding ways to get “shelf take-away” data every day and using that to drive production and shipments to your customers’ sites.
In any event, it will certainly mean not continuing to do business tomorrow like you did it last year.
Resolve to Introduce New Products and New Offers More Quickly and with a Lower Investment
Making a new “product” doesn’t necessarily mean re-engineering the hard-goods. Many times the new “product” is merely a change in the way the customer interacts with the product or the mode in which it is delivered.
Example: Goods were being shipped from point-to-point for centuries before FedEx introduced “guaranteed overnight delivery.” The basic service didn’t change at all. It was getting a parcel from point-A to point-B. But FedEx dramatically changed the mode and expectation of the customer.
Many products that are not presently learning, upgradeable or interactive in the past can be made so today. One major elevator manufacturer has installed diagnostic software and a cellular device into its elevator systems. Now the elevators can diagnose their own potential problems and call for their own service (in many cases) before the building managers even know that a problem is developing.
Use some of the earlier “resolutions” (from Part 1) to unleash your firm’s innovation to discover ways to redesign your offers and your supply chain around what your customers really need and want. Redesign everything from the outside in.
Resolve to Run a Different Race
Be honest with yourself.
Figure out where your company lies amongst the four quadrants in the diagram above.
- Are you failing by remaining both undifferentiated and ineffective in addressing your market?
- Are you risking by leading the way through differentiation while lacking effectiveness in delivering products and services on time and at a price your customers will continue to pay?
- Are you competing—just running with the pack, trying to keep up?
- Or, are you leading the way, unleashing all of your firm’s capabilities by unlocking market-differentiating, waste-eliminating, profit-improving differentiation and effectiveness?
If your firm is competing, risking or failing, you don’t get to decide which race to run. The course of the race is set by those who lead through differentiation and effectiveness.
Make a resolution today to find your way toward leadership in some market segment that you have identified and that builds on the core strengths of your enterprise..
Resolve to Excel in Execution
Resolve not to stay stuck in what worked last year or the year before.
Excellent companies—those who are clearly in the leading quadrant—have learned to change. They don’t run the same way as their competitors. They expect roles and responsibilities to change as the market changes and as customer expectations change.
Resolve to become more agile and more responsive to the changing culture, the changing world, and the changing nature of the economy.
Resolve to be willing to give up old metrics and to discover new ones—new metrics that unify your enterprise as a “system,” not divide it artificially into departments and functions each seeking their own performance goals. Too often these old KPIs have pitted sales against production, or production against finance, or finance against inventory management.
It doesn’t make any difference if production is “efficient” while your firm is losing money because lead times are too long or sales are being lost due to poor quality or high prices.
Resolve to discover that excellence in execution can only be measured, in the final analysis, by the performance of the whole system. It is the whole system that produces the bottom-line results—either profit or loss.
Resolve to Sustain the Transformation
Don’t let your resolve be for just 2014!
Above all, resolve that you will make 2014 the beginning, not of a campaign or management fad, but of a process of ongoing improvement—a POOGI!
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Happy New Year!
