Assistance for the Business Owner

Welcome to Outlaw Group, Inc.'s Blog designed specifically for the Business Owner. Each week I will be providing vital information for your business, regardless of size. I would like to start this blog off with a timely article on re-engineering your company. Is it for you? As a part of this blog, I would welcome feedback, questions and concerns! Please feel free to email me with any issues you are facing as a business owner and we'll address them.

Is Re-engineering for You?
Many people view re-engineering as a ”quick fix” or “cure-all.” Some see it as a politically correct term for lay-offs and downsizing.

Many businesses are finding that they cannot “cut their way to growth.” They continue trying to take the expenses out of the business, when lack of sales or declining margins is the real source of lack of income. While they may be able to improve the bottom line once by reducing staff and cutting costs, it only has a short-term effect. Human assets, once lost do not return.

Expenses can only be cut so far until they begin to hurt current operations, new product development, marketing, and even customer satisfaction. Reducing expenses in critical areas may have a short-term effect, but in many cases it speeds the downward spiral and dooms the company to even more difficult times in the long run.

Re-engineering was espoused by Michael Hammer and James Champy in their book Re-engineering the Corporation. They focused on the customer and suggested that processes be re-engineered to make them easier and more effective in serving the customer. The by-product of this improved process was to be increased customer satisfaction and reduced cost. On many this message was lost.

When companies attempt to implement a re-engineering project on their own, many miss the mark and the results are disastrous. Some simply reduce their staff and operations, without developing ways to do the work more efficiently, causing their people, the work, and the customer to suffer.

The most critical and costly mistake is the assumption that what is being done is right and the customer wants it. Many fail to ask what the customer values and wants. You cannot remove enough cost to make an unneeded operation profitable!

Instead of re-engineering, a better approach is to use Results Engineering, especially with small and medium sized or “nitch companies.” Start at the beginning and ask the strategic questions: What business am I in? What does the customer value? What is the customer willing to pay for? How much is the customer willing to pay?

Companies like Nike have found that they don’t have to build a better shoe or even a less costly shoe. They found out what shoes their customers wanted, and what they were willing to pay for them. Then they engineered their results by determining how to build that shoe, in the quantity needed, to produce the results they wanted.

Companies using Results Engineering have a wonderful opportunity to be more responsive to their marketplace and even to exploit opportunities by entering new market segments.
If you or your organization is contemplating change, or if it is already underway, make sure it is done well. Your organization’s future health will depend on it.