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.

Published by Lean 4 Business

An experienced Interim OpEx Manager with a solid history of success as global consultant for some of the world’s best-known companies e.g. GlaxoSmithKline, Tata Steel, Lamborghini, Nokia. On-staff go-to resource in Operational areas. Has managed teams of >250 people. Strong background in Engineering, able to rapidly assess issues and fix them, fast decision maker. Builds and leads teams and relationships that meet and exceed goals and expectations. Highly adept at developing and implementing initiatives that enhance business efficiencies delivering game-changing performance and significant reductions in operating costs. Demonstrated skills in overseeing projects from concept to completion delivering huge financial benefits. Expert in Lean, Six-Sigma, Theory of Constraints and Operational Excellence. English native speaker, good French, conversational Italian and beginner Arabic. Member of the Advisory Board - Pharmaceuticals and Technology Practice™ Interim Partners™ Areas of expertise: Operations Management, Manufacturing management, Production Management, Supply Chain development, Production Engineering, Engineering Management, Asset Management, Process & Equipment redesign, Interim Management, Performance Improvement/Transformation, Business Start/Scale-up, Change Management, Operational Excellence, Coaching, Mentoring, Supply Chain Specialty: Getting stuff out the door on-time and at quality/cost. "Works hands-on across businesses to deliver game changing outcomes."

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