As an industrial marketing consultant my focus is on helping manufacturers increase profitable growth by improving their marketing and selling methods. Many manufacturing CEOs have totally bought in to the (valid) concept that process improvement and innovation are two linchpins of growth. Depending on your situation, you may just find that in spite of a commitment to continuous process improvement and innovation you still are finding growth to be a bit of a challenge.
I usually find that these manufacturing CEOs who are struggling to grow their companies despite ongoing process improvements or dedication to innovation are two-thirds of the way to exponential growth. Unfortunately they are making a big mistake by missing one crucial element. Once they add this third crucial element to the mix they soon start to enjoy the kind of growth that would bring a smile to the most cold-hearted commercial lending officer.
Focusing solely on reducing manufacturing costs and process improvement
The first issue are those manufacturing CEOs who have an over-reliance on Lean, Six Sigma, and other process improvement practices. Obviously, these practices have proved their worth in countless manufacturing companies. To say they are not extremely useful (and quite possibly essential) would be absurd.
But as the old adage goes no one ever cut their way to growth.
So while a focus on keeping costs down and continuous process improvement is advisable it is only one-third of the equation to manufacturing growth.
Focusing solely on innovation
The second issue are the many manufacturing CEOs who view innovation as being the answer to all that ails manufacturing in general and their manufacturing companies in particular. Once again, only a seriously misguided individual would not agree that innovation can be used as a major point of differentiation in establishing a sustainable competitive advantage.
This reminds me of another saying, “If you build a better mousetrap and do not market it effectively you will end up with a warehouse full of better mousetraps.”
A focus on innovation can result in products and services that result in a strong competitive advantage it is ultimately only one-third of the equation to manufacturing growth.
The third element
If your objective is to have a fast-growing manufacturing company you need to have a balanced series of activities that encompass cost-reduction and process improvement, innovation, and strong industrial marketing skills.
Anyone in manufacturing who has sent out an RFQ also knows the least expensive product does not always win. Anyone in manufacturing who has devoted their time to producing the best product or service also knows that innovation does not always win. The sad but true fact is that quite often those companies with the strongest industrial marketing skills have an enormous advantage over their process or product-obsessed competitors.
If you are a manufacturing CEO who has a laser-like focus on process improvement and innovation you are two thirds of the way to business growth. Once you expand your focus to include continuous improvement of your industrial marketing activities you are attacking any growth-related problems in three directions. Commit to a three-pronged attack that includes effective industrial marketing and you will soon see your growth rate improve.