July 21, 2022: Reduced risks and lower costs
Speaker: Eileen Mendel
Risks of a small to mid-sized company
1) Too much emphasis on one product
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Lack of product pipeline
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Product becomes obsolete in the marketplace quickly
2) Hesitancy to bring in experts
3) Company runs out of money
4) Company loses key employees
5) Disengagement of workforce due to
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Cultural fracture
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Chaos
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Feral org
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Corporate gambling
Costs of a small to mid-sized company
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Labor costs are no. 1 expense. They include – Equipment, Training/Learning curve and Turnover
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Enterprises systems – Software to track sales, Finance, HR, etc
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Manufacturing costs
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Marketing and promotion expenses
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Accounting
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Legal
The biggest asset of a company is employees. They contribute 72% of value.
Replacing a single employee costs 1/2 to 2 times their salary
Millennials and Gen Z comprise a higher portion of the international workforce and they have no stigma of job hopping. It is also the era of The Great Resignation.
Emotionally intelligent leadership is required to combat that.
Managing risks
Managing risks is a balancing act between the high risk of bringing new innovative products in the market and the ability to penetrate the market to reach profitability and increase market share.
Managing risks requires
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Organizational alignment to Vision and Mission
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Consistent communication between teams across all functional disciplines
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Internal and external surveys of employees and customers
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Mentoring new and prospective managers on leadership
Examples of companies that did not adapt and take risks
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Kodak – No. 1 film maker in the world for many years but was too late in entering the digital camera market and eventually filed for bankruptcy
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Blockbuster – Was a major player in video rental market but didn’t respond to livestreaming market. It went bankrupt.
Examples of companies that took risks successfully
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Apple – Launched iPhone, iTunes, Apple TV leading the way to revolutionize communication and entertainment
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Uber – Major disruption in the rent a ride industry, created a whole new industry, benefited drivers and customers
What helps to lower risks?
1) Responsible Visionary Leadership
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Keeping pace with technology
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Keeping on top of marketplace conditions
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developing a team culture
2) Weekly Company meetings
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Receptive to input from the workforce
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Communication with customers
3) Building a strong foundation for growth by establishing Core Values, Vision, Mission and Strategy to create an internal culture that is engaged and aligned.
Benefits that result in lowering costs
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Greater productivity
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Higher efficiency
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Less Employee Turnover/ Attrition
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Greater Teamwork/ Employee engagement
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Clarity of Purpose/Goals
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More Stability for growth
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Openness to Innovation
Higher margins/ Profitability