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Can We Do That? : ICMS – Success is NOT Logical
Can We Do That?
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9 August 2013 - 23:25, by , in Customer Profitability Analysis, No comments

Can you sell and distribute products at a mere 5% gross margin and expect to make a profit? Tech Data does. They make millions by only accepting orders that fit a specific profile. Ask yourself, “Can we do that?”

Can you rank employees higher than customers and be a successful company? Southwest Airlines and Ritz-Carlton Hotels both do. If employees who work with the customer don’t feel cared for, they won’t care for the customer. Ask yourself, “Can we do that?”

Fearful times call for fearless living. If you or your organization has become a fearful recluse during the current economic downturn, break out of the doldrums. Bury your outdated practices and give birth to new processes, procedures and products.

Working hard at what does not work, doesn’t work. If this statement fits you or your organization, it’s time to bury outdated practices and give birth to creative new processes, procedures and products. Here are some ideas to consider:

  • Search out and try new things
I’ve never learned anything from anyone who agreed with me. Search out and listen to new ideas, new methods and new friends. In January ’03, Bob Doig, owner of a industrial parts distribution company, decided to try ICMS’ ABC-based Gross Margin Profiling system. In less than six weeks, his company has won back a previously lost large customer, pruned unprofitable vendors from the product line and increased pre-tax profit by almost two percentage points.
  • Search out and try proven things
In Failing Forward, author John Maxwell says,“Mistakes become failures when we continually respond to them incorrectly.” (1) Therefore, we should ask, “What did the winners of the 1990-91 recession do right?”If we search out and repeat what worked for the winners, we have the potential to reap the same rewards in 2003. Jane C. Linder and Brian McCarthy have published a study (2) of 1990-91 recession winners. Both winners and losers of the 1990 recession reduced costs and shopped for bargain assets. Only the winners used the principles of Activity Based Costing to: (a) cut non-value added costs and “diverted resources to activities that actually created value”; (b) “priced for profitability”, walking away from bad business while losers did not; and, (c) leveraged unique information systems to give them “the ability to manage and gain insight about their key value drivers.”

Different is not necessarily better, but better is necessarily differentI listened this morning to rock star Rod Stewart’s new CD. He sang the great old standard, The Very Thought of You. My reaction was, “This is certainly different, but not necessarily better.” To stand out and be of value in today’s marketplace, you and your organization must be different and better.

Can we do ____________? Can I do _____________? Fill in the blank for you or your organization. Think creatively, because challenging times give cause for creative responses. If you come up blank, ask people you admire for one or more ideas. Attend seminars. Read books. Spend time in prayer. Attend conferences. Take a one-day sabbatical from work to just think. Or call me. Do something! Don’t come up blank.

Today is a perfect time to begin your search and try new things to thrive through the recession. When people ask you, “Can we do that?” take it as a positive sign. It means you’re stimulating people out of their struggle with the past. Can we do that? Yes you can!

(1) Failing Forward, John C. Maxwell, Thomas Nelson Publishers, 2000
(2) “What Did the Winners of the Last Recession Do Right?”, Jane C. Linder and Brian McCarthy, www.Accenture.com, 2003

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