"you cannot save your way to prosperity"

"when the finance or accounting department drive savings, often times they do so without seeing the big picture of how cost cutting might impact employee and customer satisfaction as well as loyalty.
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 you cannot save your way to prosperity . When you cut costs without considering the impact on employees, customers, and overall loyalty, you make a conscious decision to follow a short-term path with poor long-term results.
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When revenue falls, it is natural to think about cutting costs. If you do cut costs, be careful about your message to employees and customers. Customers and employees don’t want to board a sinking ship. Focus your efforts on where you can add the greatest value for your existing and future customers."

Trechos retirados de "The Good, The Bad, And The Ugly Of Cost Cutting
Comment Now".

Contra o mainstream (parte IV)

Parte I, parte II e parte III.
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Para concluir a análise de "The fatal bias":

"Wasted opportunities are a far more significant source of economic inefficiency than wasted resources. [Moi ici: Como não recordar a parábola dos talentos e, a diferença de comportamento entre os servos que apostaram no crescimento da riqueza e, o que teve medo de a perder]...If ‘cost-competitiveness’ or ‘labour-productivity’, or ‘competitive benchmarking’ or ‘operational excellence’ or ‘affordability’ is a defining feature of the frame, then the thinking is unlikely to yield profitable solutions....If we were required to carry a 20 per cent premium price on our products and services, how would we change our thinking? If we had to double our margins without cutting our costs, what strategy would we pursue? [Moi ici: Este é o mindset que tento instilar. Recordo projecto há mais de 10 anos que teve muito bons resultados, apesar do empresário ter uma queda para o controlo dos custos e o espremer as ineficiências, que lhe roubava tempo precioso. No ano passado, voltamos a almoçar e a primeira coisa que me disse foi "Tinha razão! Andava demasiado preocupado com os custos e a deixar de dar tempo e atenção às oportunidades de ouro que podemos criar"] If there were no recriminations for making mistakes in the bold pursuit of greater success, what investments would we choose? If we were forced to double our cost base over the next five years, what changes would we make?Simply by shifting the frame, we would get to different strategies, priorities and solutions. These more strategically astute questions play to our optimism, our imagination, and our responsibility. They get the creative juices flowing. And by countering the lazy option to cut costs, they are more likely, all other things being equal, to lead to enhanced performance."

O veneno

"In an era of ever increasing commoditization of products and services, companies are increasingly more dependent on their service personnel to create differentiating, commanding, premium experiences. When customers can hardly see the difference between competing products and services, the human services step in to create the desired differentiation. It is the people and the way they deliver the products and services that justify the premium price or the preference.[Moi ici: São as pessoas que criam a interacção na base da co-criação de valor]
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In their zeal to prove their importance, the cost-cutters forgot to report to Wall Street about the ultimate price and who pays it. The answer is quite simple: the customer.
The companies that focused on cost cutting also diluted the value of their products and services.[Moi ici: Um autêntico veneno] The zeal to reduce costs led to accelerated commoditization of products. In response, customers became efficient as well, searching for the lowest prices and refusing to give their loyalty to a specific company. In the face of a bland product with no exciting features, the customer found no reason to pay a premium or to prefer one product over the other. Enter the price game.
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Focusing on cost reduction and efficiency without investigating who is paying the real price is common, even at companies that declare their loyalty and commitment to customers."

Trechos retirados de "Passionate and profitable : why customer strategies fail and ten steps to do them right" de Lior Arussy.

Contra o mainstream (parte I)

Encontrei há dias um texto que me encheu as medidas, um texto que sintetiza muitas das ideias veiculadas no meu trabalho ao longo dos anos, um texto que vai contra muitas das ideias do mainstream, ou não fosse eu um contrarian assumido, um texto que até usa o mesmo tipo de palavras-chave que uso para facilitar a comunicação e que nunca, ou raramente, vi serem utilizadas por outros.
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O texto é "The fatal bias" e começa assim:

"The prevailing managerial bias towards cost efficiency is seriously harmful to corporate performance.
Overall cost leadership is not a viable strategy.
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Of the 25,000 companies in Raynor and Ahmed’s sample, only a handful achieved strong and sustained success with this strategy. They conclude that: “Very rarely is cost leadership a driver of superior profitability… it could have turned out that price-based competition was systematically more profitable, or that cost leadership took precedence as a driver of superior performance – but it didn’t.”
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“on average, boards devote nine times more attention to spending and counting cash flow than to wondering where it comes from and how it could be increased”, the implication is clear: there is a perilous bias within many top management teams towards the invariably losing strategy of cost competitiveness."

Ser eficiente é mau? Claro que não!
Não querer desperdiçar é mau? Claro que não!
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O problema é fazer da eficiência e do desperdício os alvos supremos. Por isso, tantas e tantas vezes chamo a atenção para o retorno da atenção, para a necessidade de não ocupar a nossa pequena largura de banda de atenção com tanto enfoque na eficiência, nos desperdícios, nos custos. Por isso, falo sobre a importância do numerador sobre o denominador.
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O denominador encolhe-nos o pensamento, o numerador abre horizontes.

Outra verdade que tento passar no meu contacto e interacção com os empresários ao longo dos anos: uma estratégia baseada no preço não é para quem quer, é para quem pode.
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Outra proposta deste blogue e da minha vida profissional, algo que aprendi recentemente a chamar de obliquidade ao ler John Kay:

"the evidence being that companies whose goals are financial tend to underperform those whose purpose is more visionary.[Moi ici: Por isso, tantas e tantas vezes defendo que o lucro, como o emprego, não são objectivos, são consequências]
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Perhaps, in a similar way, a focus on cost-cutting has the unforeseen consequence of cutting revenues and therefore margins at an even faster pace. What would appear at first glance to be a bold assault on waste and inefficiency turns out to be a careless and costly assault on earlier investments made by even bolder managers in the competitive differentiation of the enterprise."

O que este texto faz é desmascarar tanto e tanto discurso, o que ocupa a maioria do prime time dos media e do ensinamento das universidades, sobre o custo como o factor crítico da competitividade.
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Tanto e tanto empresário que apenas tem como meio de informação a que recorre os media, e os universitários que nele pontuam, já caíram neste conto do vigário dos custos serem a única forma de competir... ser ignorante, assim, é uma vantagem.
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Continua, porque isto tem muito sumo.

"We are not cost cutters" (parte II)

"Companies that focus on cost cutting must confront a simple truth that they prefer to ignore or deny: there is no such thing as a free cost reduction program. Any balance sheet will tell you that if you take from one side of the equation, you affect the other side - a simple rule that every bean counter knows well. However, the unasked question in a cost reduction program is: Who pays the price?.
Customers pay the price. Cost cutting leads to accelerated commoditization of products and services. Customers begin to see fewer unique and differentiated products. Cost reduction also means fewer people to serve customers, so more of the service is done by the customers themselves. The people who stay on board to serve customers are not as excited and ambitious because their morale is so low. Cost reduction exacts an enormous price, and the prime target is our usual victim - the customer.
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cost-cutting efforts over the last few years have significantly diluted relationships with customers."

Em sintonia com o que escrevemos por aqui ao longo dos anos.
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Recordo o grito indignado de Hermann Simon em "Managing for profit not market share":

- We are not cost-cutters!

Quem não se concentra nos custos, no denominador, concentra-se no numerador, concentra-se no preço, concentra-se na criação de valor, concentra-se em Mongo!


Trecho retirado de "Passionate and profitable : why customer strategies fail and ten steps to do them right" de Lior Arussy.

"When senior leaders are tasked with growing a business"

Mais um trecho interessante retirado de "Elevate", de Rich Horwath:

"As the results show, your ability to craft, communicate, and execute sound strategy will determine the firm's financial results. It's one thing to ask a manager to reduce costs by 15 percent. She will readily come tip with a laundry list of ways to reduce costs. It's an entirely different thing to ask a manager to profitably grow the business 15 percent. She will most likely be stumped or trot out the same old line-up of tired tactics. When senior leaders are tasked with growing a business, many quickly turn to the acquisition of other companies. Mergers and acquisitions capture many of the headlines in business publications, but do they capture profitable growth? While some companies have become experts at identifying M&A candidates and then successfully blending the new business into the existing one, it's not necessarily the norm. Multiple studies over the past 20 years have shown that the majority of acquisitions actually destroy their own shareholder's value."

Por isto é que torci logo o nariz ao título sobre o novo plano estratégico da PT.
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Por isto é que o Paulo Peres estava preocupado com este resultado para as empresas brasileiras em "A fome de aquisições do empresário brasileiro"

Um exemplo das consequências do ROA

"72% of all new products don’t meet their revenue targets. And a quarter of companies, according to the same survey, confess that not one of their new offerings met its profitability goals.
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what’s causing this high failure rate
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[when a product fails] it’s not a technology problem or a pure R&D problem — it is really around marketing, customer segments, and of course pricing.
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Your survey also details how hard some companies are finding it to raise prices. For instance, you found that only a third of all planned price increases actually get implemented, and for every 5% price increase attempted, only about 1.9% is achieved. Why are companies having such a hard time raising prices?
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One of the odder findings in your survey is that 58% of companies say they are currently in a price war – but 89% of those blame their competitors, not themselves, for starting it. Why does pricing feel so out of executives’ hands?
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[Moi ici: ROA - Return of attention. O tempo que se investe numa coisa não pode ser usado para outra] For many years, CEOs and executives have focused on improving the bottom line through cost cutting, finding efficiencies in operations and the supply chain. Companies have gotten better and better at that. Pricing is also a highly impactful driver of revenue, but companies probably spent the least amount of time on it. Often it’s the most misunderstood driver in a corporate boardroom. It’s not something that gets a lot of attention in business school, relatively speaking. However, it is also one of the easiest things to change and companies tend to be more reactionary [than strategic] about it."

Trechos retirados de "The Silent Killer of New Products: Lazy Pricing"

Recordar "Aumentar preços"

O conselho!

Mais um excelente trecho retirado de "The Three Rules":

"The prevalence of revenue-driven profitability among exceptional companies is perhaps most significant for what it says about how best to use ROA as a guide to strategie action.
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As we explored briefly in chapter 1, since ROA is a ratio, there is no mathematieal difference when ROA is inereased by adjusting any of its constituent elements. Raise price or volume, reduce costs or assets ... the arithmetic cannot tell the difference. (Moi ici: Advinhem qual a interpretação dos teóricos da tríade, desconhecedores da relações amorosas e crentes monoteístas no Excel)
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But in practice there seems to he a very real difference. Miracle Workers are not wastrels, but they do not rely ou cost leadership to drive their performance. Both in our population of exceptional companies and in our sample, Miracle Worker status is a consequence of gross margin advantage driven hy higher price or volume—and as often as not enabled by higher costs and frequently assets. ln other words, exceptional profitability demands, beyond a point, making trade-offs, accepting higher costs as the price of being truly exceptional. Driving profitability from merely good to truly great by reducing either costs or assets is not something we see, as an entirely empirical matter, to be the most likely route to Miracle Worker performance."

Um conselho sempre presente neste blogue.
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Li este trecho a caminhar para casa, depois de deixar o carro na revisão e, pensei nas "guerras" que às vezes é preciso ter nas empresas, para conseguir passar esta mensagem... a competição pelo custo está tão entranhada... e eu não tenho o tempo de antena da tríade, sempre a martelarem a mensagem da competição pelo custo... e como sublinhei há dias, com base em Gary Klein, uma mentira muitas vezes repetida passa a ser a verdade oficial, mesmo perante evidências que sustentam o contrário... é um combate desigual.

Como é que os desconhecidos podem aproveitar os tempos de crise? (parte II)

Na parte I,  falava-se sobre uma oferta que "rasga", de algo inovador, de moda, por exemplo. Mas os desconhecidos têm mais hipóteses de entrar, aproveitar os passos em falso dos cost-cutters:

"There is constant pressure in business to improve margins through cost-cutting. This is particularly true in 2013, when consumer confidence is shaky and many community costs (particularly in food) are on the rise.
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Cost-cutting can be the mother of invention, inspiring creative problem-solving and efficiency. But it can also tax product quality over time. Consumers may not notice the change in any one cost-cutting round, but the cumulative effect over time can weaken the products materially. Chronic cost-cutting was a major factor behind the horse meat scandal.
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Chronic cost-cutting creates an opportunity for new brands to out-premium the premium brands.
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In the push to increase margins, it’s important to remember that there can be a cost to cost-cutting."

E pensar que esta é a única receita que a tríade conhece... cortar nos custos e remeter-nos para o tipo de competição que empobrece os países... race-to-the-bottom.
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Trechos retirados de "cost-cutting"

Interessante, nestes tempos de downsizing na banca

Um terço das instituições financeiras perdeu dinheiro, nos últimos seis meses, por causa de decisões automáticas de programas de computador...
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Um quarto das instituições financeiras perdeu cientes, nos últimos seis meses, por causa de decisões automáticas de programas de computador...
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Informação retirada de "Money, Risk, People and Processes"

Falta de bom-senso

“Cost cutting is just one of the steps in the process towards extinction.”

Como  posso deixar passar em branco uma provocação destas!!!
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Claro que tinha de ficar aqui arquivada no blogue.
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Claro que há muitas circunstâncias em que cortar custos é de elementar bom senso:

"All you do as an organization should either directly contribute to a positive outcome for the customer who is happily paying for the service or there is a legal compliancy requirement. Anything else you’re doing: stop doing it. And you should be able to adapt rapidly. Most organizations are doing many, many more things that are either waste or actually destructing value to the customer. Both things happen often just because “that’s the way things are done around here”."

Só que para poder fazê-lo é preciso:

• saber quem são os clientes-alvo;
• saber quem não são os clientes-alvo e ser consequente;
• saber qual é a proposta de valor dirigida aos clientes-alvo. 

Por isso, é que tantas empresas parecem ter falta de bom-senso.

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Trecho retirado de "The Positive Alternative for the Cost Cutting Pandemic"

Um programa para uma PME

O Pedro Soares recomendou-me este artigo "Steve's Seven Insights for 21st Century Capitalists".
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Claro que desconfiava que eu encontraria alguns iscos demasiado aliciantes para deixar passar:
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"Matter. "Do you want to spend the rest of your life selling sugar water — or do you want to change the world?"" (Moi ici: Se lerem Steven Pressfield em "The War on Art" vão perceber o que é a Resistência, vão perceber porque tanta gente desiste e prefere a segurança anónima em vez de ousar)
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"Do the insanely great. "When you're a carpenter making a beautiful chest of drawers, you're not going to use a piece of plywood on the back, even though it faces the wall and nobody will ever see it." We're awash in a sea of the tedious, the humdrum, the predictable. If your goal is rising head and shoulders above this twisting mass of mediocrity, then it's not enough, anymore, to tack on another 99 features every month and call it "innovation." Just do great work." (Moi ici: Mateus, 13: 44-46 gosto particularmente da atitude do negociante de pérolas. Ele não é um simples negociante, ele alia o seu trabalho com o gosto pelo belo)
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"Build a temple. "Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do."" (Moi ici: ;-))
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"Don't build a casino. (Moi ici: Esta é, apesar da beleza das outras, a que mais aprecio. Atá já a transcrevi recentemente num postal... se calhar esta é o princípio e o fim de seguir as outras) "The cure for Apple is not cost-cutting. The cure for Apple is to innovate its way out of its current predicament." This one's easy in principle — but difficult in practice. To illustrate: guess how much debt Apple has? Zero. Not as in "a few million," but as in: "not a single penny." "

Pensamento estratégico para crescer e para cortar

"According to a recent McKinsey Quarterly survey, 79 percent of all companies have cut costs in response to the global economic crisis—but only 53 percent of executives think that doing so has helped their companies weather it. Yet organizations continue to cut. Cost reductions often go wrong, we believe, and our experience suggests that they can be done in a better way." (Moi ici: Para começar, don't get me wrong, se acredito, como acredito, que estamos a viver uma verdadeira recalibração, e que na maioria dos sectores não se voltará tão cedo ao mesmo nível de consumo que existia, antes do fim do deboche consumista internacional que acabou em 2007, há que fazer algo, por que com a redução do consumo vem a redução na venda de unidades, e com a deflação vem a redução na facturação por unidade vendida. Assim, se se reduzem as entradas de dinheiro e se o fenómeno vai durar, há que ser realista e reduzir as saídas de dinheiro. Logo, há que reduzir custos. Mas que custos?)

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"Here’s an example of how things can go wrong. An international energy company that needed to save money fast started by simply defining the amount of savings it needed and then required each department to cut costs by a similar amount, primarily through head count reductions, which varied from 17 to 22 percent. The reality, however, was that the company needed to invest more in certain technological areas that were changing quickly, as well as in operations, where performance was far below industry benchmarks. What’s more, the HR and IT departments substantially duplicated certain activities because different layers in the organization were doing similar things. Much deeper cuts could therefore be made in these functions, with little strategic risk. But the company cut costs across the board, and just six months later, technology and operations were lobbying hard to bring in new staff to take on an “uncontrollable workload,” while substantial duplication remained in HR and IT." (Moi ici: o corte nos custos realizado sem pensamento estratégico, procurando ser justo e equitativo. Pero todavia, já deviamos ter aprendido com o Rei Lear que a vida não é justa nem injusta, a vida é a vida. Cortar nos custos não pode ser guiado pela justiça! Uau, como esta última frase pode ser mal interpretada!!! Cortar nos custos tem de ser uma questão de estratégia!)

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"We suggest a better way: companies should start any cost-cutting initiative by thinking through whether they could restructure the business to take advantage of current and projected marketplace trends (for instance, by exiting relatively low-profit or low-growth businesses) or to mitigate threats, such as consolidating competitors. An important part of the analysis is to understand a company’s financial situation and the range of potential outcomes under a number of different external economic scenarios. Second, within the resulting strategy, take time to understand which activities drive value—in the public and nonprofit sectors, a good proxy might be mandated outcomes, such as the number of workers, health metrics, or school performance—and which activities do or could make the organization competitively distinctive. Organizations should invest in value-creating activities and cut costs in others while meeting clear financial goals in a set time frame." (Moi ici: This is the answer, estratégia de criação de valor, realizar os cortes nos custos orientado pela estratégia de criação de valor. Quais são as áreas onde podemos e queremos fazer a diferença? Nessas temos de continuar a investir, parar é definhar e iniciar o processo de corrosão da imagem da empresa na mente dos clientes-alvo. Nas outras áreas, naqueles processos que não são críticos para a execução estratégica, aí sim, realizar os cortes nos custos. Exactamente, estava em Vouzela quando, há anos, escrevi este texto no carro sobre os processos críticos e os de contexto (parte I, parte II e parte III)

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Trecho retirado de "A better way to cut costs".

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