Times are fluid – cost of goods and labor are up, margins are under pressure and there are ‘big’ shifts unfolding fast in manufacturing equipment, manufacturing IT and e-commerce. The lines between direct mail, merchandise, apparel and signage are blurring. So how do you win in fluid times? Is it doubling down on what you know or building capability and agility? This week’s video is about flanking the competition and succeeding. Go well.
Transcript
Things are pretty fluid in business at the moment. Outside the GSC and the early years of the HB Indigo, I don’t think there’s ever a time when I’ve seen so many big items in play at the same time. For the first time in my career, all in movement at the same time, we’ve got our labor cost, our cost of goods, technology that we use for manufacturing, technology and how we do work, and also how we talk to and integrate with customers, which is even changing which markets that we see. And the result is really odd. Margins are tight because our cogs are changing, but there is plenty of growth to be found in merchant apparel, depending on which piece of research you believe forward CAGA is seen as being somewhere between 12 and 18%. So it’s odd. It’s hard to know when to hire and when to invest. And I think what it says about winning is that driving profit hard is not just about top line growth. Building profit is about operational agility and doing things that the shop next door can’t do. And from the people I talk to, I see five places of innovation going on at the moment. One, they’re measuring everything. They’re obsessing on data. Two, they want to know margin at the job level, just not average across the factory. Three, they’re automating repetitive tasks, they’re pulling up profits. Four, they’re creating agility in a manufacturing. They expect to be able to push work across different workflows. And fifthly, they’re adding more complex products and extending their product line, adding new capability, basically because they can, they’ve got the agility built into their method. So add all that together. And at times, I think it means that when things are tough, it’s all about building capability to drive growth rather than just using the same existing formula and just pursuing growth for its own sake. Hope those thoughts are useful. Want to have a yak? Reach out. Love to talk to you about it.
