Cost Cutting or Competitive Advantage?
Last week, I got a call from one of my friends who used to work with me at an IT company. He was heading a team of 6-8 sales professionals for a medium sized software company in Bangalore.
As I was talking to him, I realize one thing that there are more than few top executives who just can't look beyond cost cutting. Of course, I am not saying that cost cutting is not important but there are certainly better things that you might want to do to improve your business. Cost cutting can be your priority but should not be above gaining competitive advantage. You should definitely keep your finance close but keep your human resources closer. If you don’t get what I mean, then give me a few minutes.
There is no argument whatsoever that the best way to gain tremendous market share is through differentiation. You heard it before and know that you should have something unique, something that your no-other competitor has and perhaps your sure-way to win the 'heartthrob' award during the next industry meet. Better said than done but how exactly are you going to create that 'differentiation'?
The only way to emerge as a leader in the corporate landscape is to build a company that lives and breathes on innovation. Identify and develop a team of professionals who don’t suffer from 'Change Syndrome' but addicted to change. Don’t get me wrong, by change I don’t mean just for the sake of it but something new, something different that adds little value, if not more, to the everyday changing lives of your customer.
To live up to that expectation, you have to set a culture that encourages innovation at every sphere of the organization. It is very important to ensure that you as a top management executive clearly communicate until the last person of the organization that your organization walks the talks and reward the power of innovation in kind and money. It would be a good idea to include innovation as one of the key responsibilities of the delivery / practice – Heads so that each employee would know whom and how should they communicate their ideas and suggestions. With some extra rewards and recognition, you would see that employees would make personal attention to ensure that their ideas work well.
As more and more innovative ideas come up, you would see your organization scaling up its productivity and this people-advantage would soon bring competitive-advantage by delivering your products / services faster, cheaper and better. Hope then you would write back to me to tell me that good you didn’t focus on cost cutting but on innovation that helped you gain that competitor advantage you always dreamed about.