Building Lean Companies: How to Keep Companies Profitable as They Grow
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However, there is a considerable gap between leading edge companies and the rest of the pack when it comes to the adoption of lean and green ideas. There are far too many companies still delaying creating a lean and green business system, arguing that it will cost money or require hefty capital investments. They remain stuck in the "environment is cost" mentality.
Being environmentally friendly does not have to cost money. In fact going beyond compliance saves cost at the same time that it generates cash, provided that management adopts the new lean and green paradigm. Lean means doing more with less. That's why lean management supports green thinking and vice versa. Nonetheless, in most companies, economic and environmental continuous improvement are separate organisational silos and sometimes even come into conflict with each other.
This is one of the biggest opportunities missed across most industries.
Some companies are using lean and green as simultaneous sources of improvement in various sectors of industry — from automotive and retail to textile and brewing. The size of the opportunity is enormous. It suggests that one of the biggest levers for delivering this opportunity is "increased efficiency through management and behavioural change" — in other words, lean and green management. In my experience, this is conservative: Some 47 studies from the likes of the Economist Intelligence Unit, Goldman Sachs, AT Kearney, Deloitte, MIT Sloan, Harvard and others show that companies that commit to such aspirational goals as zero waste, zero harmful emissions, and zero use of non-renewable resources are financially outperforming their competitors.
Seven hallmarks of superior marketing and sales capabilities
Unaddressed, this will double by Here is an example. A couple of months ago I worked with one of the largest sandwich factories in the world. A team of great men and women engaged in a programme to reduce physical waste using problem solving techniques. The results were staggering. No one expected to see nearly 1, tonnes of waste prevented in just a few weeks in a very mature industry.
Building marketing and sales capabilities to beat the market | McKinsey
Add to that, they also saved 9m litres of water from going down the drain every year with interesting financial benefits. Low growth and profitability relative to market.
McKinsey Quarterly Our flagship business publication has been defining and informing the senior-management agenda since The four fights you have to win Article - McKinsey Quarterly. Mastering the Art of Managing Money. For example, a building-materials business found there was enormous value available about two percentage points of margin from improving capabilities in transactional pricing, sales, and local tactical marketing. Many senior executives still argue that the return on investment ROI from marketing and sales is just too difficult to assess, especially when compared with revenue-generating line businesses.
Investment should focus on foundational capabilities that give businesses the tools to grow, such as transactional pricing, performance management, and customer-portfolio management. Without this foundation, companies will not be able to make it to the next stage. Low growth but high profits. To promote growth, companies should focus on building capabilities in branding, strategic marketing, customer life-cycle management, and customer service.
High growth and high profitability.
To become a market leader, businesses need to invest in higher-factor skills such as channel performance and integration as well as alternative go-to-market approaches such as inside sales or e-commerce. Thinking institutional capabilities, not just individual skills. Different elements of a business often have their own perspective on the relative importance of a given capability. That can be problematic: The only way to implement true institutional capabilities is to encourage a broad, inclusive discussion that creates a clear view of which capabilities are necessary across the entire company and how to prioritize them.
In effect, companies must create a common and accepted frame of reference. For example, one company regularly surveys 2, of its marketing and sales people about their sense of the need to build a particular capability. While this feedback provides valuable insights, it also helps to create a single working vocabulary about capabilities.
Reward Yourself
Having an operating model to keep it all running. Without the right operating model to support change, even the most advanced capabilities will wither. An operating model needs to be specific and measurable, including elements such as clear annual performance-improvement goals; scheduled and formal reviews throughout the year by segment, key account, and other categories; individual and business-unit performance reviews; incentives aligned with institutional goals; and leadership role modeling to shape the culture.
Culture, in particular, should not be underrated. One consumer-electronics company, for example, revitalized its sales in Europe by focusing on a program to deliberately build a growth culture. It reorganized teams so they spent more time with customers, became more focused on execution, and enforced stronger accountability both for teams and individuals.
- If I Touched the Earth;
- 12 Steps: Starting A Business While Working Full Time.
- Small Changes for a Better Life.
- 12 Steps: Starting A Business While Working Full Time;
- The Interview (Master of Subservience);
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In addition, executives worked to become more agile through faster decision making, creating cross-functional teams around specific initiatives and using technology to collaborate virtually. While transforming marketing and sales capabilities to drive growth is not easy, many companies have difficulty simply knowing where to start. In our experience, CEOs and senior executives should ask the following three questions to get the process moving in a fruitful direction:.
Building Lean Companies - How to Keep Companies Profitable as They Grow (Paperback)
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Environmentally-friendly business is profitable business
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