Tom Peters wrote â€œThe Circle of Innovation â€“ You Canâ€™t Shrink Your Way to Greatnessâ€ nearly 11 years ago, yet its message is as relevant today.
Innovation is the only perennial strategy of success. Full-stop. (That’s “period” to my American clients). If we don’t innovate, we lose ground to those who do, or lose our market share swiftly.
I recently rediscovered Peter Cheales’s “I was Your Customer” series. He quotes a Right Associates study – led by Virginia Lord – which polled 1204 American companies, each of whom had downsized its staff by at least 500 people during the 1980’s recession. “75% reported no improvement in financial performance, (while) 66% said there had been no improvement in productivity and (fully) 80% noted a significant decline in standards of customer service.”
Being the last man standing can make you feel insecure. Or bitter. And if you are Key Talent in your industry, you will seek out greener pastures. And customers cannot be served by a vacuum. It takes well-trained, professional staff who understand the needs of customers, in order to satisfy them. It’s not rocket-science. But it is more than an executive financial decision.
Most companies who downsize don’t really have a clear idea how the cost-cutting will benefit them. They merely focus on the loss of expenditure, such as salaries. While investigations into resource-wasting are to be encouraged, training and retaining your best performers is what enhances your competitive advantage. Your Sustainable Differentiator involves Service and Value-creation.
What about growing sales instead? Branching out into new markets? Innovating a fresh approach? researching customer needs and meeting them? Networking with clients in a more practical way? Risk! Risk! Risk! Reward!
This is the season to invest and explore. Wisely.