[Management Column Vol. 76] The Strategy of Discarding

basic information

Please use this as hints for management decisions, such as building a management foundation, improving management quality, cash flow management, bank relations, business succession, and restructuring after the appointment of the second or third generation. Also, feel free to contact us with any questions or inquiries when putting this into practice.

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Applications/Examples of results

When considering growth strategies, "what to start" is just as important as "what to stop." Peter F. Drucker stated in his writings, "Only a very few companies have discarded yesterday. As a result, only a very few companies have the resources necessary for tomorrow." If you continue to allocate human resources and funds to areas where you cannot expect results, you will not be able to concentrate management resources on the businesses that should be nurtured. First, let's reassess the current situation from two perspectives. 1. Lowering the breakeven point Review transaction conditions and suppliers to reduce variable costs. Also, optimize fixed costs such as organization, locations, and facilities by identifying necessary functions. 2. Stemming losses Confirm profitability and future potential by business, customer, product, and area, and consider withdrawing from areas where improvement is not expected. Make judgments based on future profitability rather than past successes or entanglements. Before dispersing management resources to new possibilities, how about objectively viewing daily operations and engaging in thorough weight control through "discarding"? "Discarding" is a strategy to secure the resources necessary for future growth. Next time, I will discuss "Are we developing a habit of procrastinating on issues?"