How do you get customers to send bouquets to staff for great service (literally) yet cut costs at the same time? By discarding (almost) everything you think you know about management and doing the opposite. Here are seven counterintuitive business truths, distilled from nine uplifting (how often can you use that term in connection with a management event?) success stories recounted at a Vanguard Leaders Summit last month—included among them, M-Prize winner Owen Buckwell .
Manage value not cost. Most managers assume that improving service increases cost. Wrong. Cost reduction is a by-product of focusing on value as defined by the customer. By working to deliver the right service at the right time with minimum effort managers release capacity, boost productivity and reduce overall cost. Directly trying to manage cost drives cost up; managing value drives cost out.
Economies of flow not scale. Economy of scale is inseparable from standardization and mass production. Even in manufacturing, it’s obsolete, killed off by Japanese companies that do quality, volume and variety on the same assembly lines. In services, where demand is infinitely variable, it’s...
Most of the time you take your office computers for granted. OK, there’s a niggle or two, but generally the IT folks can sort it out. Occasionally, though, it gets more serious. When the system crashes regularly or a virus hijacks the network there’s no easy alternative: you need to upgrade the whole system, maybe even rewrite the code from the bottom up.
Yet for anyone not living on some other planet – anyone, for instance, who has lost a home, a job or pension rights on had their salary frozen in the last couple of the years—Cable’s remark was only shocking as a statement of the blindingly obvious.