Resorting to the Last Resort : The Blindingly Obvious!
Posted By Rob Millard - 0 Comments -
Tom Peters quotes the Wall Street Journal today in a post titled To State the Obvious ... In it, he notes that in order to return to something resembling profitability, the airlines have resorted to the last resort - doing the obvious. Namely: Stop doing dumb things. i.e. : Get rid of flights that lose money.
In the same post, he also notes that in a recent survey, the chief commonality between companies that achieved superior Profit/ROAs ('return on assets') in 240 industries was that they "aggressively weeded out customers who generate low returns."
There's a lesson here for a frightening number of professional service firms.
I can do no more than refer readers that have not yet seen it, to my posting What Do "Bad" Clients Cost Your Firm (which has proved to be the single most read posting in the history of this blog.)
While we're on the topic, how close does a firm's back need to be to the wall before its leaders are prepared to resort to the last resort and do other things that are blindingly obvious, like:
- Weeding out practice areas or offices that are losing money and cannot be fixed without diluting the strategy? (Strategy ... what strategy???)
- Weeding out partners who consistently lose money and who are unresponsive to attempts to reform, retool or otherwise rehabilitate them?
Comments, as always, are most welcome and may be posted below.
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