{"id":377,"date":"2017-08-05T04:28:55","date_gmt":"2017-08-05T04:28:55","guid":{"rendered":"http:\/\/www.realworldconsulting.kiwi\/rwc\/?p=377"},"modified":"2018-05-30T19:47:14","modified_gmt":"2018-05-30T19:47:14","slug":"managing-costs-to-achieve-efficiencies-is-a-production-mindset-and-is-only-a-band-aid-short-term-solution","status":"publish","type":"post","link":"https:\/\/www.realworldconsulting.kiwi\/rwc\/rwc-blog\/managing-costs-to-achieve-efficiencies-is-a-production-mindset-and-is-only-a-band-aid-short-term-solution\/","title":{"rendered":"Managing Costs to Achieve Efficiencies Is a “Production” Mindset…and is Only a “Band-aid” Short-term Solution"},"content":{"rendered":"

I was reading a very well written article by Kirk Hope (CEO of BusinessNZ) this afternoon, in which he highlighted innovation<\/strong> as being the underlying ingredient that enabled Team NZ to secure the Americas’ Cup this time around. I wholeheartedly agree.<\/span><\/p>\n

He also commented on how little<\/strong> N.Z. companies are devoting to Research & Development – only half a percent of GDP, compared to 3 % of GDP in the case of many other developed countries. Wow – what a fact to discover, yet I’m not surprised.<\/span><\/p>\n

Having been a Regional Business Advisor in Hawkes Bay, it is incredulous to see that still – this far into the 21st Century – so many businesses devoid of any real strategic vision\/ creative bent\/ innovative flair. It actually saddens me to know that this is the case; and was a key reason why when I was asked by various Hawkes Bay business leaders what did I consider were the main revelations from engaging with HB business owners\/ clients, my answer was consistently…no strategic vision\/ plan\/ framework to guide the direction of businesses.<\/span><\/p>\n

It is interesting to see – as recently as within the past month – the Hawkes Bay Chamber of Commerce appoint a ‘Business Coach’ who has a primary responsibility of helping Hawkes Bay businesses conceive and articulate business strategy. I fully commend the Chamber of Commerce for creating this function. In my opinion it is the single most important starting point (i.e. the development of a Strategic Plan) for all<\/strong> businesses around the world. You simply cannot take stakeholders on a journey (and win\/ earn their “buy-in”) if you can’t show them “what” journey they’re on ! I have commented on this well-proven fact in my first book, in-depth.<\/span><\/p>\n

Secondly, trimming costs\/ following “Lean Principles” is not<\/strong> a “strategy” per se. Rather, this only amounts to “operational tweaking” to achieve cost efficiencies. Such measures will only create short-term stop-gap solutions if your business is fundamentally failing to capture the engagement of customers. You can only trim costs to a finite degree, after which the suitability of your business’s resource base (capacity) will quickly be called into question. If you reach a point where your human resource base falls markedly below essential HR capacity requirements you will quickly find that your efforts to “lighten the ship” in order to achieve cost savings will in fact become “cost saving\u00a0inefficiencies<\/strong>“.\u00a0<\/span><\/p>\n

If you want to build a sustainable business then don’t work with a “production-driven” mindset. Rather, develop a “marketing-led<\/strong>” mindset, where\u00a0innovation <\/strong>is the main driving force.\u00a0<\/span><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

I was reading a very well written article by Kirk Hope (CEO of BusinessNZ) this afternoon, in which he highlighted innovation as being the underlying ingredient that enabled Team NZ to secure the Americas’ Cup this time around. I wholeheartedly agree. He also commented on how little N.Z. companies are devoting to Research & Development – only half a percent of GDP, compared to 3 % of GDP in the case of many other developed countries. Wow – what a…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/www.realworldconsulting.kiwi\/rwc\/wp-json\/wp\/v2\/posts\/377"}],"collection":[{"href":"https:\/\/www.realworldconsulting.kiwi\/rwc\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.realworldconsulting.kiwi\/rwc\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.realworldconsulting.kiwi\/rwc\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.realworldconsulting.kiwi\/rwc\/wp-json\/wp\/v2\/comments?post=377"}],"version-history":[{"count":2,"href":"https:\/\/www.realworldconsulting.kiwi\/rwc\/wp-json\/wp\/v2\/posts\/377\/revisions"}],"predecessor-version":[{"id":872,"href":"https:\/\/www.realworldconsulting.kiwi\/rwc\/wp-json\/wp\/v2\/posts\/377\/revisions\/872"}],"wp:attachment":[{"href":"https:\/\/www.realworldconsulting.kiwi\/rwc\/wp-json\/wp\/v2\/media?parent=377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.realworldconsulting.kiwi\/rwc\/wp-json\/wp\/v2\/categories?post=377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.realworldconsulting.kiwi\/rwc\/wp-json\/wp\/v2\/tags?post=377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}