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Jun 30, 2009


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No doubt, "disruption" is here to stay, whether one is talking about Outsourcing certain business processes, breaking out of an organization's out-dated view of the competitive landscape or the rise of women to leadership roles. If someone needs ammo about the importance of disruption to business, I recommend they avail themselves of Tom Peter's thoughts at www.tompeters.com


I think we all are guilty of spending too much time looking at the bottom line from a cost perspective.
The reality is that great companies that survive and thrive do so by continuously reinventing themselves and growing top line growth whilst managing their cost base effectively.
Sourcing should be about making the organisation easier to do business with, increasing flexibility in the delivery model and reducing the cost to serve.
We should never lose sight of the fact that taking 20% out of a 5% cost base by sourcing is incredibly inefficient, from a money and human capital perspective, when compared to growing your revenues by 5% to 10%. Overly simplistic but I think you get my drift.

Frankly I think the biggest danger to small business is being squashed like a bug by the enormous conglomerates that are being bailed out by government.

I think letting panic override judgment is the worst possible danger to businesses. They see their profits or market share drop or their stock price drop, their shareholders yelp, and they freak out. After they do the sensible things in terms of cutting costs and trying to increase productivity and rebuild their bottom line, instead of saying "well, it's a downturn, it's awful, we have to ride this out and we've made XYZ preparations," they turn to the stupid side of the force.

They forget infrastructure maintenance, which will cost them down the road.

They close plants (incurring costs that may be greater than those of repair).

They don't just lay off, they decimate, causing more personnel writedowns, impairing the economy as a whole, and doing lousy things for their image, for worker morale, and loyalty (what's that?).

They forget about R&D. They slash marketing (which isn't very forward-looking), and they bring in overpriced consultants.

Sometimes, the best thing to do is hunker down and ride out the storm.

Susan Shwartz

I find in the economy one of the biggest dangers to businesses is losing a great deal of their market share. In these tough times many business owners look at their expenses and decide to cut their marketing budget! This is defiantly the wrong thing to do since right now is the biggest oppurtunity in the marketing world.

With hundreds of companies in every industry scaling back their marketing budget there is a huge potential to gain a larger share of the market in these tough times. If you were to increase your marketing and advertising you would be able to effectively gain considerable market share. In the same effect people still have needs and wants during a recession and money is still being spent.

After the recession is over and everything is on the up and up again you will be able to retain your market share and grow considerably. This is the time to push hard! If you push now, you are setting your company up for success in the future!

I likewise concur. We have striped our companies of capitalization through the removal of earnings aire marked for shareholder satisfaction. As a result we are forced into a cost reduction mentality to further meet earnings goals. But as you point out there has to been an end or at least a innovation transformation. The rub is that innovation is not something that you train into an organization, it has to exist in both culture and in the talent pool. Unfortunately that pool may not be housed outside the organization as a result of staffing cutbacks. We are apt to see new startups but given the funding shortages may not see the rally that we would have expected in better times.

Those business that stagnate will die in this economy. Outsourcing can act as a change agent, but ultimately it's the will to embrace change and try out new ways of driving our cost while transforming processes.

Your articles get better and better. You really strike a chord here Phil. Stagnation is a huge issue for many companies right now.

Bryan Jones

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