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Building the Fit Organization: Six Core Principles for Making Your Company Stronger, Faster, and More Competitive by Daniel Markovitz

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2Increase Value, Don’t Cut Costs

Leaders err when they use cost cutting to reach financial targets. Long-term success requires that leaders focus on increasing the value that their organizations deliver to customers. Managing exclusively by financial results is ineffective in creating real value, since it leads only to transient benefits. Financial numbers are by definition lagging indicators, so by the time leadership takes action, it’s already too late. The damage to the organization’s reputation and customer satisfaction has already been done. By contrast, fit companies manage by means. They monitor, fix, and improve their operational processes in real time. Figuring out how to increase the value created by any process yields both happier ...

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