Business Models
Business Models
Since 1980 when Ronald Reagan and Paul Volcker fixed the high levels of inflation with a drastic increase in interest rates we have been operating on a “cost control driven” business model.
This model now needs to have a dramatic review and update.
- I don’t believe anyone can make money by reducing costs alone.
- We are driven by sales per employee metrics to the point of obsession.
- We have beat up supply chains to extract costs.
- Just in time inventories supply chains are the norm.
- We have “computerized” business processes, moving a paper form to an input screen. We have not improved them.
- We have concluded that market coverage is too expensive and seen precipitous reductions in market share as competitors have taken our customers by simply calling on them.
- We have taken on incredible levels of risk thinking low interest rates are with us forever.
- Rental inventories have grown and money has been made without the offset to risk abatement.
- With market changes the escape valve for too much inventory is nowhere in sight.
Now is not the time to have the technocrats and managers, alone, determine what needs to be done to improve business. Now is the time to include and involve every single employee in this effort. Never forget that the employee doing the job should be the one that knows that job better than anyone else and to ignore them is not only wrong but truly a shame.
The Time is Now.