Our business education compartmentalizes Sales, Operations, Marketing, and Human Resources, and implicitly
teaches that product development is the responsibility of engineers. As a result, senior managers can abdicate
responsibility for new product development. All key participants in an organization should be called upon and
accountable for new ideas and the need to invent new products and services. If education identified product
development essentials like:
• Identifying “underserved needs”
• How to invent a new product
• How to estimate manufacturing costs
It would encourage future employees to cultivate new ideas and whenever possible, protect them by patents. Once an
individual understands the value of new product development and its related steps, s/he can significantly contribute
to company growth through innovative ideas and market expansion.
Fact Confirmation is Key
It is common to find businesses where the key employees are all operating out of a divergent set of basic facts about
their own employer. Key facts may include the number of orders per day, average revenue per order, average cost of
freight per order, and other comparable “key statistics”. One of the key first priorities of a new management team
is to define these facts, confirm them or perfect them, and then re-communicate them back to all team members so
that everyone is operating from a common understanding.
Recognize the importance of Raw Intelligence
Experience within a business or an industry is valuable, but there is no replacement for raw intelligence. Executives
are called upon to constantly improve their organization and its performance. Stability of mid-level managers
with industry experience can bring organizational stability. Management's challenge is to know how to recruit
needed talent with high raw intellectual skills (matched by their motivation and dedication) while maintaining
organizational stability using experienced industry or company employees.
Know your products, your product costs and the competitive advantages related to manufacturing location. Custom
products with fast turnaround can be competitively made domestically. Stock products can be made competitively
when outsourced if freight cost does not outweigh the offshore cost advantage. Knowing the costs and advantages
of offshore manufacturing , which in the short term might reduce the size of your workforce, is key to building a
larger and stronger company.
Cost Reduction vs. Sales Growth
Many businesses can immediately benefit from streamlining operations and implementing cost reductions. Staff
reductions, outsourcing, and eliminating unprofitable product lines may be needed, but benefits from these reforms
are limited to the size of the business. To maintain strong sales growth while optimizing overall company value, it is
important to balance business streamlining with long-term revenue growth goals.