Change Implementation Techniques for Creating a Sense of Urgency

Technique 2.24 Checking the Diminishing Returns

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To determine where your organisation is on the chart of diminishing returns, you need to consider the following questions:

1. How many cost savings can your organisation wring out of its current business model?

2. Are you and your colleagues working harder and harder for smaller and smaller efficiency gains?

3. How much revenue growth can your organisation squeeze out of its current business model?

4. Is your organisation paying more and more for consumer acquisition and market-share gains?

5. How much longer can your organisation keep propping up its profit and/or share price through share buy-backs, spin-offs and other forms of financial engineering?

6. Is top management reaching the limits of its ability to push up the profit and/or share price without actually creating new wealth?

7. How many more economies of scale can your organisation gain from mergers and acquisitions?

8. Are the costs of integration of mergers, acquisitions, take-overs, alliances, joint-ventures, partnerships, etc beginning to overwhelm the savings obtained from slashing shared overhead costs?

9. How different are the strategies of the 4 or 5 largest competitors in your industry from your organisation's strategy?

10. Is it getting harder and harder to differentiate your organisation from its competitors?

If you answered "not much" and "yes" more than a couple of times, then you need to re-look at your organisation and business model.

(source: Gary Hamel, 2000)


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