I ran a short training session last week for a group of HR consultants on pricing.
This week we have one of the largest ever recalls of consumer products by Whirlpool, who are recalling around 500,000 washing machines because of a potential safely fault.
Washing machines and HR consulting – the connection?
It comes back to what we are really buying.
With HR services businesses want reduced effort, time savings and value for money. When we buy washing machines we want, er, reduced effort, time savings and value for money. In both cases we assume safety, or reduced risk.
I am no expert on washing machines, but I am increasingly aware of consumer reports on cars, electricals (including iPhones?) and furniture where products do not perform as expected because cheap components do not last or do not deliver over an extended life. This may or may not be the issue with your Hotpoint washing machine.
Yet it can remind us that delivering value does not always mean delivering at the lowest cost. The concept of zero-based budgeting has taken something of a knock this year, especially following the results of Kraft/Heinz whose profits and revenue have fallen having used this budgeting tool.
When using HR consultants, do you go for the cheapest or the best? If sourcing consultants those are not easy concepts to define.
We live in a mainly rich world where expectations of performance and reputation are high. Does your cost management strategy meet with your customer’s and your brand’s expectations?
Buzzwords of the Week –Liquid Assets
Definition – Current assets (usually stock and accounts receivable) that can quickly be exchanged for cash.
Alternate View – The key here is the liquid, not the assets. No one wants stock – they want to serve their customers but the ideal is take delivery in the morning, sell it in the afternoon. Not always possible, even with all the “just in time” you can manage! Same with your accounts receivable (Debtors to my UK friends). This is your money in your customers’ bank account. Who wants these assets, when you could have the cash? Keep them turning over – quickly…