Leading Blog

JUNE 23, 2020

W HEN David Cote became CEO of Honeywell in February of 2002, the company was a train wreck. Grow while keeping fixed costs constant. He inherited unhealthy accounting practices, unresolved environmental liabilities, and a board and staff that were denying reality. When he took over, Honeywell was plagued by short-termism.

Short-term 275

Short-term Long-term Fixed Costs Efficiency 275

Harvard Business Review

MARCH 28, 2011

CEOs can take several measures to tackle the Black Swans that may affect their supply chains. Companies keep costs down by building supply chains that generate economies of scale. That was effective when companies made products in their home markets using locally produced components. Variabilizing costs.

Supply Chain 15

Supply Chain Fixed Costs Price Crisis 15

Harvard Business Review

MARCH 28, 2014

While Facebook is still working diligently on mobile applications, CEO Mark Zuckerberg went so far as to hint that the acquisition places the company on the cutting edge for the next pervasive platform: virtual reality. Virtual reality is not a disruption to the computing market, instead it stands poised to disrupt content consumption.

Disruptive Innovation 8

Disruptive Innovation Automotive Software Fixed Costs 8

Harvard Business Review

SEPTEMBER 9, 2015

During an economic crisis, the exaggerated decline in orders can be especially damaging to upstream suppliers that have high fixed costs tied to production assets. Ford CEO Alan Mulally tried to mitigate the impending bullwhip during the 2008 financial crisis by imploring the U.S.

Supply Chain 8

Supply Chain Retail Crisis Operations 8

Harvard Business Review

APRIL 6, 2016

The latest nuclear reactor designs, promising higher safety, longer operating life, and lower operating costs, cost up to $25 billion after factoring in the huge budget overruns. This all presents CEOs with a tough dilemma.

Co-Opetition 8

Co-Opetition Operations Cost Technology 8

Harvard Business Review

MAY 8, 2012

Skype , for example, competes with fixed-line carriers by offering free mobile Skype calls. Google has its own contender in the market, Google Voice. Bharti's innovative business model converted fixed costs in capital expenditure to a variable cost based on usage of capacity. The trend is spreading.

Outsourcing 10

Outsourcing Wireless Telecommunications Core Competence 10

Harvard Business Review

JULY 20, 2011

A succession of CEOs prior to Rick Wagoner (who fought heroically to overcome the dreadful hand he was dealt) allowed all manner of legacy costs to build up (retiree health, Jobs Bank, etc.) and those largely fixed costs were more painful and debilitating if GM shrank in the U.S. market: small and mid-car.

Company 12

Company Franchising Fixed Costs Banking 12