It seems that we may be reaching the final bitter end of the corporate anorexia process. It's been over six years since the year 2000 craze, and since then many firms have been focused on outsourcing, right sizing and getting lean and mean. You know that something has run its course when a good idea like "lean manufacturing" is applied to functions such as marketing or sales, where it was never intended.
I think some of the last gasps of the downsizing are upon us. The news that GM is releasing over 120,000 employees demonstrates that even the old dinosaurs have recognized that mere trimming around the edges isn't enough. There are still some drastic cuts to be made in firms that have only tinkered around the edges, but my sense is that we are nearing the end of this strategy.
Once we've reached the end of the downsizing, right-sizing and outsourcing craze, what then? What will managers and executives turn to as a strategy for the future? It seems to me that growth will become a key issue. Growth in many firms has been sacrificed over the last few years, and profits pushed up by cost cutting. However, now that many more firms are "lean and mean", what's the new strategy? The lean and mean strategy has it's logical limit - eventually you can't cut anymore people and have to find new methods to drive revenue and profits.
At an innovation conference this week I heard a speaker talk about the end of corporate anorexia, and a turn to growth through innovation. There's a lot of talk now in the market about innovation and the need for growth, but I think many firms lack the focus and methods to innovation successfully. There's a significant difference between cutting jobs and implementing lean concepts and encouraging and nurturing new ideas and new products to grow revenue.
I agree with the speaker - I think the natural evolutionary cycle will end soon on the corporate anorexia process. There's just so far that strategy can take us. The question becomes - what's the likely dominant strategy for the next five to ten years? I think it's going to be building an innovation engine in these businesses, and bringing new products and services to market even faster. After all, we now have the "lean and mean" execution processes - Six Sigma and ERP and Business Process Re-engineering should have smoothed out any issues in the execution side of the business. Now. we've got to focus on the idea generation and new product development side of the business.