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Re-think

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Re-think

A Business Manifesto for Cutting Costs and Boosting Innovation

FT Press,

15 min read
10 take-aways
Audio & text

What's inside?

Savvy business reorganization requires focusing on the all-important “whats” and not the ancillary “hows.”

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Editorial Rating

7

Qualities

  • Applicable

Recommendation

Business architect Ric Merrifield says many executives get hung up on the “hows” of running a firm: the techniques, tactics and technologies their companies use to operate. In the process, they fail to focus on the all-important “whats” of their enterprises, that is, central functions like manufacturing quality products, fulfilling orders, satisfying customers and so on. Lost in superfluous details, these leaders can’t see their real priorities. Merrifield says that for many such executives, basic rethinking is in order. In this book, he explains how to take a fresh look at your business to identify and prioritize your core activities. Although the metaphorical overload of “whats” and “hows” might make you want to ask, “Who’s on first?” this is a solid take on leading innovation. getAbstract recommends it to any executives who suspect they may need to refocus or broaden their perspectives about their organizations.

Summary

First, Do No Harm

Home Depot built its reputation on having friendly, knowledgeable salespeople who could give customers immediate expert advice on repair and improvement projects. In 2000, Robert L. Nardelli joined Home Depot as its new chairman and CEO. He immediately cut costs, reduced employees’ hours and curtailed store managers’ independence. Numerous people quit. As he built more stores, revenues increased, but customer satisfaction dropped. Home Depot was no longer differentiating itself from other big-box competitors. Its rival, Lowe’s, stepped in with service-oriented staffers. Soon, customer surveys said people liked Lowe’s but not Home Depot. Lowe’s revenues soared. Home Depot’s stock price stagnated. In 2007, its board fired Nardelli.

Nardelli’s moves to cut costs and improve operations seemed sensible. His mistake was focusing solely on making Home Depot more efficient by reducing costs. In so doing, he became a victim of the “‘how’ trap.” He forgot the importance of Home Depot’s “what”: supplying a satisfying shopping experience for do-it-yourselfers. Nardelli made a common mistake and Home Depot suffered as a result. Many executives worry so much about...

About the Author

Ric Merrifield is a business architect for a large software company, where he has filed many applications for patents of companies’ operating models. He was a consultant for 15 years.

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