While many companies often resort to shaving employee benefits and squeezing their suppliers to cut costs and turn a profit, others are showing that you can turn an even greater profit by building business relationships that last.
By Raj Sisodia, contributor
(ManagementInnovationeXchange) -- I would not give a fig for the simplicity on this side of complexity, but I would give my life for the simplicity on the other side of complexity. --Oliver Wendell Holmes
When it comes to managing costs, most companies operate with a simple model. They start by trying to maximize their gross margins so that they have a high cushion for spending in areas where they feel they need to spend heavily in order to compete, such as advertising and promotions. But a growing number of high-performing companies are showing that there is a better way to manage spending and improve performance. These companies live and operate on the other side of complexity.
Over the past several years, we have studied a group of companies that defy conventional wisdom and, at first glance, seem to perform financial alchemy. These companies pay their rank-and-file employees much better than their peers, have suppliers who are profitable, invest heavily in their communities, pay taxes at a higher rate, provide terrific customer service, invest in making their operations more environmentally sustainable and do not foist costs onto society. With all this spending, it would seem that there would be less left over for investors. More
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