Driving Change Requires a Lens of Accurate Costs and Profit, Part 1

Doing business today is more challenging than it has ever been in the past.  Corporate mergers and acquisitions have increased dramatically.  Innovation continues at a pace never seen before.  Global partnerships are challenging the business status quo.  Government regulations are forcing tremendous oversight on the way business is conducted. The largest generation in the world is retiring and taking their knowledge capital with them.  A possible global economic slowdown means that resources need to be allocated to the products and services that matter most to the customer and maximize profit.


 

So you want to survive in today’s business environment?  Create an organization focused on profit that can change quickly!

Doing business today is more challenging than it has ever been in the past.  Corporate mergers and acquisitions have increased dramatically.  Innovation continues at a pace never seen before.  Global partnerships are challenging the business status quo.  Government regulations are forcing tremendous oversight on the way business is conducted. The largest generation in the world is retiring and taking their knowledge capital with them.  A possible global economic slowdown means that resources need to be allocated to the products and services that matter most to the customer and maximize profit.

The new ways of doing business are stressing old processes and systems.  Managing cost and driving real, sustainable profit is harder with compressed product lifecycles.   More data doesn’t mean more accurate insights.   Beyond that, profit pressures mean most teams must find ways to do more with less.

Executive management teams need deeper insights, and greater clarity of cost and profit data in order to invoke a sense of urgency within their organization thus allowing the organization to change and rise to the challenge.   Static cost allocation schemes don’t reflect the realities of changing supply prices, energy costs, and configure to order.   Scarce capital must be allocated to specific, achievable and real business cases.   All of this needs more accurate detailed views of costs and profits by customer, product, facility, and line in order for the change initiative to add any value to the organization.

Without clarity, a true strategic goal, and formalized change management processes and procedures, most organizational change management efforts fail to meet their objectives. For some organizations, their change initiatives produce early results, but over time the organization lapses into the old ways of doing business as new priorities take the attention of executives.  At other organizations, employees are paralyzed as they deal with several competing change initiatives at the same time.  For these organizations, changes don’t lead to consistent, sustainable performance improvements that matter to the bottom line.          

After years of working with clients to maximize profits, an organizational change management approach has been created to help organizations change rapidly to the world around it and realize true profits.          

In the next few blogs, I will share some hints about how to empower change management with these deeper insights on the customer, product, facility, and process. 


Jeff Klabish (jklabish@altavia.com) is the Organizational Change Management Practice Director at Alta Via Consulting LLC.  As a certified Lean Six Sigma master black belt with over 20 years of organizational change management and Lean Six Sigma experience, Jeff has realized over $300 million dollars in cost savings through his Lean Six Sigma efforts.


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