Product category:
Consultancy in Business + Management Systems
News Release from: PDS | Subject: Ignore the averages
Edited by the Processingtalk Editorial
Team on 06 April 2004
Manufacturers encouraged to ignore the
averages
Companies should not succumb to the negative messages from recent surveys showing a drop in profit levels: PDS advise them to ignore the reported averages and look through the problem, not at it
Companies in the West Midlands should not succumb to the negative messages from recent surveys highlighting a further drop in profit levels for the region PDS, a strategy implementation consultancy based in Brindley Place, Birmingham, told a client conference recently, to ignore the reported averages and look through the problem, not at it
This article was originally published on Processingtalk on 18 Nov 2004 at 8.00am (UK)
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Paul Sheedy, a PDS director told companies: "There is no denying the macro climate is difficult, but don't be paralysed by it." Sheedy asked companies to consider the range of results and not just the average.
PDS presented figures based on the DTI benchmarking index that demonstrates a 6% difference in profit between the bottom and top quartile with exceptional results six times the average.
He added: "The figures for Return on Capital Employed (ROCE) are 20% between the top and bottom quartile and feature highs of up to nine times the average.
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Just in case the attendees were thinking that star performers had an advantage of a unique patent or similar, Sheedy pointed out some more startling research.
Research conducted by Professor Verdin of the renowned International University of Insead, Paris shows that star performance of companies was not due to the sector they operate in nor is it due to where they are, but is attributed to simply how well the business is run.
PDS witness this each day in their consulting work.
Their best clients are those companies who first of all are making the most of what they have.
This allows them to grow strong.
The strength brings opportunity it is then up to senior management to make the most of the opportunities they have created.
Sheedy candidly points out: "There is no point in having a killer strategy if you don't have the financial strength to pursue it".
The MDs that attended the conference were told to take close account of macro trends that have immediate effect, for example the recent increase in local steel prices due to global capacity changes.
Sheedy added: "Issues such as raw material increases require immediate action.
Other macro trends such as the competition from low cost economies should inform strategic thinking but not dictate it.
"Manufacturing expertise logistics and support services also form part of the business proposition".
Sheedy encouraged the attendees to adopt an attitude to 'do business, right here, right now'.
"Look at the opportunities you have and instead of asking yourself 'what we can do, and can that be successful', change your mind set to ask 'what do we need to do to be successful?' - then do that".
He advised that it is possible to perform exceptionally in an unexceptional environment.
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