Chapter 1. Why We Lose

We show up every day and do the things we believe are necessary to run the business, grow profits, and increase the value of the company. We create demand for products, manufacture these products, sell the products to customers, deliver service to provide a good customer experience, develop additional products and services, and measure and report the results of our efforts to interested parties. We take actions and make investments that we believe will generate acceptable profit today and grow profit in the future.

Sometimes we achieve the sales and profit goals and sometimes we do not. There are many variables and moving parts in every business that contribute to the results'some we control and others are completely out of our control. All too often, we do not have a good handle on whether the actions and investments we pursue actually work and can be repeated.

The efforts to reduce production or manufacturing costs, by their very nature, are easier to manage, measure, and repeat. We typically have control of most of these costs and they are more easily identified and quantified. The systems used to reduce these costs and predict future cost reductions are proven and readily available thanks to Six Sigma, Lean Manufacturing, and other cost management systems.

Conversely, the actions and investments undertaken to provide customers what they value most—value propositions that contribute to their profits—are not as easy to manage, measure, or repeat. Identifying ...

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