High Growth Businesses have Flexible Business Structures.
Building highly flexible structures is one of the ways businesses can be successful in periods of dramatic downturn as well as being better positioned for recovery.
A few of the ways in which flexible business structures can be built include the following:
- Outsource non core areas of the business as much as possible
- Avoid commitments to long term costs/major items exploring other alternatives
- Use more of rental, lease structures and other more flexible approaches for assets instead of outright purchase.
The key is to have a nimble structure and not weighed down with assets that suddenly become unproductive. The successful business have learnt to employ more of flexible contractual terms that do not tie them into rigid long-term positions. This maximises their abilities to move in and out of different cost structures for different markets and positioning.
Outsourcing is becoming a favourite approach, but must be well managed to ensure quality of customer service is not sacrificed for lowering costs and flexibility. In addition, areas where competitive advantage can be built and of core business expertise are typically not outsourced. Almost everything else can be outsourced. The outsourcing service provider is able to deliver improved costs and
quality of service as a result of a larger scale of operation and economies of scale as well as the fact that the outsourced service is the core business of the provider, thus encouraging more investment in service quality and better value. Flexibility is also built through flatter, team based organisation structures with wider spans of control made manageable by information systems and much fewer management levels. Employees are compensated more through variable pay structures more by performance and skills rather than by level.
The high growth businesses have learnt how to build structures that allow them to reengineer their cost mix as required at short notice. Build options rather than fixed positions. The goal is to aim to make every single possible cost variable. High growth businesses are not in the real estate business to impress the market. They do not need to own assets to get the value they need recognising that ownership tends to confer inflexibility and fixed capacity that could be costly in a downturn or when a sudden change in the market requires less capacity. In the old era, the maxim was to buy, own and show off your building and computers as evidence of strength. The new world will be more dynamic implying that nimbleness to shift seamlessly and adjust cost structures will be valued more than a showroom display of assets that drain scarce capital.
The next post will examine how growing businesses manage people. For the full article you can click – DOWNLOAD ARTICLE.
More on God’s perspective on wealth can be found in my recently published book Wealth out of Ashes
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Have a blessed day. Amen.
Bode Ososami
They are not afraid of change instead they embrace it and look again at customers, suppliers, competitors, entry barriers, potential partners and product offerings for fresh opportunities. They ask the question “what has changed” that can be to my “advantage”. For example a bigger business may have deliberately shed some of its customers…or a collapsed inefficient competitor release some top marketing people able to generate quick leads on the labour market and weaken the supplier’s power who are now burdened with inventories and capacity they did not plan for. Bad news for someone could be an opportunity for the other.
But God is not against compensation. Although a God of grace and not merit, He is a rewarder. Fairness and justice are major pillars in His throne room. He is also able to accurately weigh actions and establish true and exact causes and consequences. Unfortunately man cannot often establish the complete consequence of an action taken today nor know the real cause of a positive and negative performance. God, on the other hand, dwells in absolute, perfect and complete knowledge and reigns in all of time at the same time. At best it is fair to say our compensation models reward and punish only what we perceive and is enough a case to be conservative and cap our awards…for they are always at best faulty. We should, for the same reasons, equally be cautious in the severity of our punishments as we often will misjudge the issues.
is setting up for future crisis though there are temporary present gains.
Bible Seminary… until Dr. Norris Anderson (Gavin MacLeod) raises an issue over a “difficulty” he has with something Carlisle has written. Dr. Anderson believes what Carlisle has written could seriously affect the future of coming generations. A manuscript emphasising morals, ethics and values without prominent focus on the Lordship and Salvation of the Lord Jesus Christ who taught those values, would lead to danger and cause more harm in coming generations. Using a secret time machine, Anderson sends Carlisle more than 100 years into the future; offering him a glimpse of where his writing will lead.
prominence and position and second…focus on money and the love of it. These arise from straying from Christ reigning in us to bowing to other “lords”. It relates also to the natural lack of control of desire which indeed dates back to Ancient Greece and the emergence then of the so called Epicurean philosophy. Even Epicurus himself wrote: “To whom little is not enough nothing is enough. Give me a barley cake and a glass of water and I am ready to rival Zeus for happiness.” But there is hope.
The previous blog post also touched on this briefly. Lifestyle Creep is only another item on the menu of the exotic cocktail hosted by mammon. The world even warns it can be destructive to all – but to the child of God, it is an advanced stage of apostasy.
It defended the children of Israel through a harsh and hostile wilderness desert for decades as they travelled in the days of Moses. Be assured, in Christ, no harm in the Recession will come to you. In these challenging times, as you seek God afresh – expect to encounter His promised Glory. Remember His word is true. We can expect divine protection, grace, glory…and His good things…as we walk uprightly and in a contentment found only in a life surrendered to Christ Jesus in us as Lord and Saviour – our Hope of Glory. May God help us.
Egypt represents the best of humanism and worldliness. These are the ways of modern industry in opposition to divine truths.