Clarity

on Thursday, January 26, 2012

In my experience, people rarely act in their own self-interest or even logically follow what they believe to be their own core values. The easiest demonstration of this is in our political system, where the new first choice of hard-core conservatives and tea party members is Newt Gingrich, a guy who believes in global warming, wants to take a humanitarian approach to immigration reform, is for strengthening the role of the executive branch at the expense of all others, and is on his third wife. Meanwhile Mitt Romney, the guy paying a 15% tax rate (isn’t that what Republicans want?), gets booed for it during a debate last week.

Clarity – knowing what you really want and the path to get you there - doesn’t always come easy. In business, during times of recession, organizations quickly rationalize the need to cut spending, which more often than not leads to layoffs and plant closures. But in doing so they lose their best people and negatively impact morale, which only serves to continue the downward revenue spiral and puts them in a weak position when things turn favorable again.

It’s during these times that companies should really focus on their revenue models, looking for new markets to expand into and new innovations that they can take advantage of. Cost cutting should still be on the table, but with indirect spend as the primary focus. Sure it’s probably only 30% of the spend pie, but the savings dollars for these untouched categories will often be significant.

Most people (Mitt Romney aside) didn’t get into business to close plants and fire people. It’s time to get back to our core business values.

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