Why emerging from a recession may be bad news for some companies

http://www.reuters.com/article/2013/09/13/us-britain-zombies-idUSBRE98C04Q20130913

This article from Reuters shows why the upside from the recession may result in more businesses going to the wall.

The fact is that many businesses, size being no distinguisher, are hanging on having stripped everything to the bone but not done anything other than slash and burn under the guise of ‘efficiency’.

The bad news is, as we have said many times before, that people are working twice as hard but on inefficient (broken) processes, see our article here… http://wp.me/p35beS-j

Therefore, when there is an upturn in demand, they will struggle to cope and either not deliver, or hire extra staff at a premium to cover the ‘spike’.

The result of this will cashflow issues.  And as a result of that, the best will just scrape by, the worst will go bankrupt!

So what can you do? – well the start is to admit that there is room for improvement, find some metrics that really mean something to your business and measure them!  Then, simply work out how efficient (or not) you are against these metrics and get better!!

Some steps to take:

  • Work out what adds value and what you are doing for vanity.
  • Do the value adding stuff more effectively, faster (without adding people/processes or waste).
  • Work out what is common in what you do (most businesses have a roughly 80/20 split in what is common/uncommon, despite their protests to the contrary).
  • Find the most efficient way of doing this repetitively with minimum waste.
  • Look at eliminating the non-value adding stuff.

Easier said than done?  ABSOLUTELY!

Necessary?  ABSOLUTELY

Remember some of the big names no longer on the high street who were taken down by the recession?  Blockbuster, Woolworths, Habitat, they all ran out of money!  Make sure you don’t!

Then

  • Develop a culture of continuous improvement; small incremental (daily) changes which improve customer service and increase efficiency.

These small changes lead to game changers; bigger improvement which lead to real competitive advantage.

So do you have the courage to move away from slash and burn?

Call Lean 4 Business on 0845 108 3949 and see if we can help you.

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About Lean 4 Business

L4B are a Lean consultancy - but our USP is developmental implementation©. We help businesses to maximise their value, and deliver step changes in productivity.
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