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According to the Harvard Business Review, “Over the last 50 years, the average lifespan of S&P 500 companies has shrunk from around 60 years to closer to 18 years.” Additionally, a National Association of Manufacturers study stated that employee benefits, tax rates, regulatory requirements, tort litigation, and energy created a 22% disadvantage. Unfortunately, while small- to medium-sized manufacturers in the U.S. are the most highly affected, they cannot change the facts, and must therefore find ways to beat the odds. The steps, though not always easy, are simple.
The first step is examining your business strategy.
- Asses the practicality of your product: Does it solve a real problem?
- Asses the relevance of your product: Do you consistently incorporate innovation and product life cycle management?
- Asses the practicality of your business model: Does it reflect changing realities?
If the answer is, “I’m not sure,” “No,” or “Maybe,” you are overdue for an update. Address strategic problems immediately.
The second step is an honest evaluation of your commitment to operational excellence demonstrated by employee output and company productivity.
- Asses your employees: Do you hire the easy option, the quick option, the cheap option? Or do you make an investment in employees who increase the company’s net talent and overall advancement?
- Asses your productivity: Do your process definition, onboarding, Preventive Maintenance, quality assurance processes, and design predict growth?
Fearing necessary but expensive systemic changes fails to take into account the important fact that profitable, practical ideas and superior talent are harder to find than money. Focus on investing in this talent. Work to preserve these ideas. Take time to be successful.
The third step is ensuring top performance. It is imperative that the work employees are performing is consistent with the strategy you updated in the first step, and commitment to the operational excellence ensured in the second step.
- Establish priorities.
- Tie them to visible goals and objectives.
- Take the necessary steps to achieve them.
The disheartening current reality is that the odds are against long-term businesses. But overcoming the odds is what makes a company unique and successful. And the steps are simple: design a robust strategy, maintain relentless commitment to relevant excellence, and take decisive action.