While doing research for a client, I reviewed an article in the Harvard Business Review documenting Nike’s experience with suppliers during the 1990s when consumers protested company practices. Nike had the products that consumers wanted. The company took a variety of actions to address the consumer complaints but with little benefit. A company practice that rewarded the supply management staff for pursuing the lowest supplier cost ultimately was identified as the root cause. Changing the practice resolved the public’s complaints.
Companies have periods of success with business and profits growing. The company’s product is widely accepted and everything is good. Then, something happens that impacts customer opinion and the business is impacted. Economic conditions may be responsible but usually other issues are the root cause. Issues may include lack of product development, poor customer support, or questionable business practices. Any issue reflects on the company foundation, so it is imperative to correctly identify and resolve issues. Consider the doctor treating a patient’s symptoms without finding the root cause. The patient’s health is still compromised; problems will persist.
Expertise in engineering, operations, marketing, and other disciplines can be overshadowed by seemingly small issues which compromise a company’s foundation. Employees’ language provides insights to a company’s culture. “What are the requirements?” and similar comments, typify an approach that minimizes compliance expenditures or avoids sanctions. Having a solid foundation facilitates the transition from cost minimization to revenue maximization, ultimately achieving profit maximization. A company’s Mission, Values and Vision statements form the foundation needed to expand capabilities and products. BCX Consulting can assist companies to build a solid foundation which enables the company to deal proactively with issues and to enhance customer relations and approval for long term success.