Every entrepreneur's dream is to make the company bigger and stronger. However, before becoming bigger and stronger, whether it can survive is the most important point. How can companies maintain their vitality in a complex competitive environment? This article will give you the answer.
Becoming bigger and stronger is the natural desire of every company. However, many companies have suffered from the disaster of extinction because of their blind pursuit of expansion, such as Aido Electric and Kelon. If you don't want to kill yourself, companies must learn to be small, slow, and specialized.
1. Make the enterprise "small"
During the process of leading GE, Welch deeply realized the drawbacks of large companies, such as too many management levels, slow response, rampant "circle" culture, and low efficiency... He envied those companies that were small but flexible and close to the market. He always felt that these companies would be the winners in the market in the future. He realized that GE should be as flexible as those small companies, so he discovered many new management concepts, including "number one or two", "borderless" and "collective wisdom", which made GE have the flexibility of a small enterprise. This is also the secret of GE's century-long success.
Making the enterprise bigger is of course good. A large enterprise is like a big ship with strong risk resistance, but it will eventually hinder the survival and development of the enterprise due to its bloated organization and extremely low efficiency. Small enterprises, on the contrary, are unique in flexibility, decisiveness and strong desire for knowledge and development. Flexibility determines the efficiency of an enterprise. Therefore, no matter how big the enterprise is, it should maintain the high flexibility unique to small enterprises. 2. Run the enterprise "slowly"
After Gu Chujun, the former chairman of Kelon Group, successfully took over Kelon in 2001, he was eager to use Kelon as a platform to borrow money from banks in the form of "ten pots and nine lids" before he could run Kelon well. In less than three years, he acquired many listed companies such as Asiastar Bus, Xiangfan Bearing, and Meiling Electric, which caused abnormal financial tension. He was eventually sentenced to 10 years in prison by the relevant government departments for crimes such as misappropriation of funds and false increase of funds. The hard-built Greencore system was wiped out in a short period of time, which made people sigh.
Many enterprises ignore their own resource shortages and blindly pursue speed, resulting in various problems. Finally, a little change in the external environment became the last straw that crushed the enterprise. Therefore, enterprises cannot blindly pursue speed, but learn to be "slow", control the speed in the process of development, always monitor the operation status of the enterprise, and avoid the Great Leap Forward and blind pursuit of speed.
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3. Make the company "specialized"
In 1993, Claiborne's growth rate was almost zero, profits shrank, and stock prices fell. What happened to this largest American women's clothing manufacturer with an annual turnover of $2.7 billion? The reason is that its diversification is too broad. From the original fashionable clothing for working women, it has expanded to large-size clothing, small-size clothing, accessories, cosmetics, men's clothing, etc. In this way, Claiborne also faced the problem of over-diversification. The company's managers began to be unable to grasp the core products, and a large number of products that did not meet market demand prompted many customers to switch to other products, and the company suffered serious financial losses. Later, the company focused its operations on working women's clothing, and then created a monopoly in sales.
The desire to make the company stronger has prompted many companies to blindly embark on the road of diversification. However, many companies do not have the conditions required for diversification, so they fail. Therefore, companies should be specialized, concentrate their energy and resources on the business they are best at, maintain core competitiveness, achieve the ultimate in the field of focus, and become truly strong.
Making a business small, slow and specialized does not mean that the business will not develop, grow bigger and stronger. Instead, it means that in the fierce competition, the business should maintain flexibility, control speed, focus on what it does best and become a truly strong company!
Post time: Aug-26-2024
