Productivity: PROCEDURE TENDER TRAP

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Brent FILSON

American companies have recently installed the largest productivity growth in 20 years, but when you look at it in the context of the profits, it's nothing to write home about.

Of course, productivity is important in business. Is that what each activity must be constantly promoted. Economists want. Analysts want. Shareholders enjoy. It's all about bottom-line growth, which shows how efficiently a business cost.

But there is something more important to business success than bottom-line productivity. It is top-line growth or income. Look at the achievements of the past two decades, the Microsoft, the HIA is IBMs (after Gerstner turnaround), these companies are successful because top-line growth, not only to boost productivity

Companies that have a dominant focus on achieving productivity growth in May fall into the trap that prevents them bid for such growth. Procurement, because it is a good feeling that the achievement of such gains and profits are often seen as an end and from each other. But it's over, just like a big top-line growth opportunities.

Here is what you what would otherwise be past as a springboard to the top-line growth.

(1) to cultivate top-line growth mind-set. This does not mean that you ignore productivity. Achieving such gains should be under way to try. But success can come at the expense of diverting resources and people from the top-line growth. In fact, the best thing I can do with the productivity should be a springboard for top-line growth. This would look for ways to increase their productivity in the growth of the productivity of your customers.

A materials supplier in the world, I worked to do so. As customers begin to beat them to the prices of their products, their leaders make innovative thing. Decided that this is a product that would sell productivity. They made an agreement with its clients to help them achieve the measured gains in productivity - in turn the line on prices.

"It was a relatively simple matter to find our customers can be productive," one of their leaders said to me. "Most companies have a long way in terms of productivity."

(2) towards the top-line growth mind-set through all functions in society. Increased productivity can be achieved in all functions of most organizations. The problem is that the leaders of these functions often sees a link between the achievement of these gains and top-line growth. Materials supplier has been successful in translating the productivity and benefits for customers, because it uses the expertise of all its functions for the customer benefits. Therefore, if productivity is increasing, for example in the areas of accounting, the company has the best practices to help their customers accounts. When people of all ranks and functions, see their work not only in a narrow range of job descriptions, but if the productivity drivers for its customers, the responsibility for top-line growth.

(3) Create a top-line growth in a strategic objective. Do not do it ad hoc. Launch your productivity to its customers, should be part of the strategic direction of the company. The increase in productivity is a strategic one-two Punch your profit is really useful (ie really good in a comprehensive way), if these profits are improving top-line to help improve your customer.

Moreover, productivity is a compliment which I called "Leadership Strategy" - as people who must implement strategies that will cause his zealous leaders.

Materials company found that it's better to increase productivity in a row, the better they are capable of such benefits to its customers, and when you help your customers in these important ways to improve productivity, you consolidate a strong relationship. Because the materials of the principal told me: "You have a customer for ball games and wine and food, but if you help them to higher productivity, and really true to you."

When I say leaders of the one-two punch, many of them say that their products do not apply to all its customers productivity. I say: "Look. You do not have to look for a direct link to your products, but I bet you've developed productivity processes that can benefit your customers."