A big challenge facing many CEO’s for next year will be how to reduce costs but not limit growth. Growth typically means maximising shareholder value and that means growing the business through increased sales, revenues, margins and profits. However each one of these ‘growth factors’ comes with an ever increasing cost base. With more sales generated there needs to be more heads in the back office to service customers. The result can be as new business volumes increase so do unit costs. Margins, revenues and profits all decline as the back office continues to expand. The challenge that quickly becomes apparent is how to grow the business but also control and reduce costs.
Operations are key to growth
The back office is not a direct driver of growth and as such is often overlooked. However, operations fundamentally underpin growth and are an important facilitator. It’s the back office that delivers on new business generated by sales and marketing and is the key to exceptional customer experience and competitive advantage.
Growth is never by mere chance; it is the result of forces working together.
The combustion comparison
The great growling engine of change – technology.