Introduction: What is the real cost reduction and efficiency increase?
Reducing costs and increasing efficiency has become a problem for many enterprises.
Drop it, but it will only "cut salaries, lay off employees, and cut projects", which makes people panic;
If you don't come down, it is indeed a heavy burden in many places.
In any case, it is an indisputable fact that the global economy is in a downturn, the market is shrinking and the competition in the whole industry is involuted.
I believe that under such circumstances, reducing costs and increasing efficiency will be the main theme of Chinese enterprises in the next five years.
So, what is the real high-quality cost reduction and efficiency increase?
3 feints to reduce costs and increase efficiency
If you want to really reduce costs and increase efficiency, you must first know what is fake.
1. 恶性降本
Some companies, in order to so-called cost reduction, use some malicious means to force employees to leave.
For example, when he wants to deal with a person, he sends HR to keep an eye on attendance, and being late is counted as absenteeism and dismissal.
Or transfer someone out of his original position, send a new person to take over all his customer relationships, and put him there, but in turn find fault with his poor performance, and make the employee resign in disguise.
Anyway, there are many routines, and there is always one that can force people away.
The most bizarre thing is that a company in Xi'an, in order to lay off employees without compensation, exaggeratedly moved the office from the CBD to the Qinling Mountains, and also required that it must clock in at 9 o'clock in the morning to work, maliciously forcing people away.
With such malicious cost reduction, they may still feel that they are very smart, and HR is also proud.
Let's not talk about whether it violates the law or not, anyway, it will definitely not be possible to reduce costs and increase efficiency, because other employees can see it, they will be cold, and they will treat the enterprise in a worse state.
2. Invalid cost reduction
Some enterprises, in the face of difficulties, the first reaction is to panic. As soon as they panicked, they engaged in formalism.
So I went on all kinds of feints, cut some inconsequential expenses, and asked for peace of mind.
For example, canceling benefits, extending overtime, cutting holidays, canceling shuttles, and even controlling the temperature of air conditioners and stopping the supply of paper towels......
Some of them are also engaged in apportionment, and the company wants to reduce costs by 20% this year, so it will be rudely distributed to various departments, and the new business that is obviously very promising must also be cut in investment.
These are all ineffective cost reductions, and they are visible small money.
And the real hidden costs of money and effort, they can't see.
For example, if I engage in formalism, I like to hold meetings, endless meetings, discuss whether to dismiss the cleaning aunt, and all the staff will clean.
However, for the business that really needs to be fully discussed, the decision is never made, which delays the opportunity and brings more waste.
Ineffective meetings and ineffective labor have led to an extreme increase in costs, not to mention efficiency.
You know, running in winter is definitely helpful to the body, but to resist the cold winter, you can't rely on running to solve it.
3. Cost reduction that hurts customer value
Some companies simply and rudely pursue cost reduction and cut key people in key positions.
As a result, layoffs are cut to the main artery, and the quality of products and services cannot keep up, hurting customer value, and the gains outweigh the losses.
For example, some bosses think that the sales crown gets too much commission, so they follow the trend to reduce costs and increase efficiency, and lay off the person who takes the most money.
But he didn't expect that people would take more and contribute more value to the company. He slashed it down, and even the customer relationship was cut off with the pin.
Do you remember last year's Didi taxi crash, which lost 10 million orders and 400 million sales in one day.
What is the reason? People in the industry believe that the main reason is the vigorous implementation of cost reduction and efficiency increase.
The old employees who are familiar with the code have been laid off, the system investment is less, the operation and maintenance personnel are insufficient, the people's hearts are fluctuating, and the work will inevitably be negligent.
You see, on the surface, HR feels that I have cut a huge labor cost, but in fact, it has done great harm to the company and damaged customer value.
Many companies, as if they were miraculous, can "accurately" cut down the people who can do the work every time.
Those employees who have strength, understand technology, and are proficient in business are accustomed to burying their heads in work, and HR can't just think that they are not important because they don't know how to perform.
The more we reduce costs and increase efficiency, the more we must focus on core competitiveness.
Do not pour the child and the water together when pouring the bathwater.
To truly reduce costs and increase efficiency, three criteria must be met
We say that the real cost reduction and efficiency increase is a system engineering.
Cost reduction is to increase efficiency, not cost reduction for the sake of cost reduction.
So, what is the real cost reduction and efficiency increase?
In my opinion, it must meet three criteria, and we will talk about them one by one.
1. Really reduce costs
What can be seen is small money, and what is invisible is big money.
Enterprises should not engage in ineffective cost reduction in some details, but should have systematic thinking. Cost reduction must be global.
The cost composition of enterprises is roughly divided into three categories: operating costs, labor costs, and product costs.
If you want to really reduce costs, you have to stand at a strategic height and systematically reduce costs from these three types of costs:
The first, operating costs. For example, due to the different frequency of cognition, the strategy cannot be implemented, due to information asymmetry, ineffective meetings, departmental suspicion, due to cumbersome processes, resulting in inagile action response, etc., these are all wasted a lot of costs.
Second, labor costs. The typical performance is to use the wrong person, once the wrong person is used, it will often cause irreparable losses, especially if the wrong pseudo-executives are used, the loss will be even greater.
Third, the cost of the product. For example, the product is out of touch with marketing, the product is detached from the customer, the marketing is deviated from the product, and each side invests a lot of money, but it does not produce results.
2. Really improve efficiency
To judge whether an enterprise is really reducing costs and increasing efficiency, the second criterion is whether it has really improved efficiency.
In fact, reducing costs and increasing efficiency are essentially the same thing.
You think, in order to be more efficient, you have to remove a lot of obstacles. The costs that slow down the organization are all hindrances to efficiency, and if you remove them, you will be more efficient.
Take Tesla as an example, they even think the other way around, not thinking about how to reduce costs, but trying to find ways to improve efficiency.
They believe that production efficiency directly determines the cost of vehicle manufacturing, so digital technologies are widely adopted throughout the production and supply chain process.
As a result, production efficiency has been increased by 2 times, but the cost per vehicle has been reduced by 30%, and the management cost is 60%-70% less than that of traditional car dealers.
Of course, reducing costs and increasing efficiency is not the only "efficiency" that can be improved. In my opinion, there are at least "five effects":
Efficient profitability, efficient collaboration, efficient decision-making, efficient execution, and efficient culture.
To truly reduce costs and increase efficiency, we will definitely work these "five effects".
3. Improve customer satisfaction
Huawei has an internal saying, "No matter how poor you are, you can't be poor in strategy, and no matter how much you save customers, you can't save customers."
It's really good to say, the premise of reducing costs and increasing efficiency is not to reduce customer satisfaction. The cost and investment in this area cannot be cut blindly.
Every business knows that customers are important, because without them, the company cannot sell products, and without revenue, the company cannot survive.
However, the more difficult the times, the harder it is to put the customer first into practice.
Because, many companies are forced to survive under the pressure of blindly pursuing cost minimization, so as to do things that harm the interests of customers.
For example, the products are shoddy, the quality is cut corners, and the service cannot keep up, deceiving the trust of customers, resulting in a sharp rise in customer dissatisfaction.
In fact, this kind of behavior of ignoring the customer's personal feelings will only end up pushing the customer further and further.
No matter how difficult the road ahead is, you have to ensure customer satisfaction, put customers first, and do everything you can to solve customer problems.
As Drucker, the father of modern management, said, the ultimate purpose of an enterprise is to create customers.
In short, high-quality cost reduction and efficiency increase are systematic cost reduction and all-round efficiency improvement, as well as continuous improvement of customer satisfaction. However, many enterprises are actually making fake actions to reduce costs and increase efficiency: either malignant cost reduction, ineffective cost reduction, or harm customer value.
In the next 5 years, reducing costs and increasing efficiency is the main theme, enterprises must not be blinded by cost reduction, they must return to the essence of management, and boost confidence with efficiency improvement!