In this economy, “reinvention” is an overused term.
Companies are forced to make cuts, and they are spinning it as a reinvention of what they do. Unfortunately for most, the cuts are made simply to survive and there’s no real vision for where they are going or what they want to do. It’s strictly a financial move meant to cut costs, not part of some larger plan to move the organization forward.
If you want to survive, you better figure out how to transform your company into something relevant for your customers. Eliminating a few positions and hunkering down to try to ride out the storm isn’t much of a strategy it’s just hope. You need more than hope; you need a strong plan.
Everyone is in the same economic boat, and as a result, everyone has the same basic needs. People want everything faster. They want more value out of it, and they want the best price. Stopping your strategy at eliminating positions might enable you to offer a lower price, but what are you doing about speed and value? These might be the two most important factors of the three.
There are different ways to increase your speed and value, but technology is probably one of the best methods to achieve your goals. For example, investing in enterprise resource planning software an integrated package that manages internal and external resources can help unite all of the information that’s in your business and put it within one system. It can get all of your departments working together and help break down silos that exist within your organization.
All of the extra data will allow you to make quicker decisions because it will all be at your fingertips and more informed decisions to help guide your business. Not waiting on someone to compile information or a report means you get answers to customers quicker, increasing your response times and thus increasing your speed.
With everyone having easier access to information and getting computer assistance for things like inventory management, you’ll gain efficiencies, as well. Now granted, ERP systems aren’t cheap. But if it’s part of a carefully laid out plan to transform your business, the investment makes sense. There are obviously other ways to increase speed and efficiency, but the point is that it needs to be part of a bigger plan. Simply cutting costs isn’t enough. You have to spend money in this case, investing in technology upgrades to make money.
Look at what other opportunities are out there. You want to stay focused within your core competencies, but maybe there are some things worth pursuing that play to your strengths that would help diversify your revenue streams.
Take IBM for example. At one point, it was a computer giant. Now IBM is primarily a software and consulting company. The company took its technology expertise and applied it in new ways and now it is a leader in the software and consulting business.
Regardless of what avenue you take, you need to have a plan that will set your company up to be ahead of the competition now and in the future. Cutting costs might be a necessary step, but it shouldn’t be the only step. Look at every opportunity you have and make sure you are optimizing your revenue and your chances for new business.
As the Old Testament says: In the morning sow thy seed, and in the evening withhold not thine hand: for thou knowest not whether shall prosper, either this or that, or whether they both shall be alike good.
Don’t change for the sake of change. Change to transform yourself into a leaner, more competitive company.
FRED KOURY is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or firstname.lastname@example.org.