Even when such conflicts of interest are not involved, too narrow a focus can be just as deadly. Many companies retain a mental model of cost reduction that doesn't apply any more, if it ever did. You not only have to MBT Staka,learn new ideas to become an effective cost reducer, you also have to eliminate old ideas that are wrong.
What are some of those harmful ideas?
1. Reducing costs in one activity will automatically reduce costs overall. Often what you save in one area is more than eaten up by increased costs in another.
2. Reducing "head counts" will lead to cost savings. If you add more expensive, non-productive heads to replace the wise heads that performed well, you are much worse off.
3. Cutting specifications won't change customer perceptions. Often specifications don't capture customer preferences. Find out what you can change . . . and what you can't by checking out possible changes with customers. Don't assume!
Copyright 2008 Donald W. Mitchell, All Rights Reserved.
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