How does a company restore optimal performance during economic fluctuations?
The relationship between resource input and output of a company is called the "operating point". Each company has its own characteristic operating point. The economy behaves like an oscillating system - cyclical fluctuations occur periodically. Particularly abrupt economic changes can shift the operating point significantly.
In search of a new operating point
Reduced output due to dramatic reduced demand leads to a massive increase in operating costs. As soon as companies are outside a certain tolerance (usually +/-10%) above or below the previous operating point, profitability is negatively affected if the company does not adapt significantly to the new selling conditions.
Strategic enterprise design allows a new operating point to be set. The company is correctly strategically positioned and is better scalable. In the long term, those companies will survive that are better able to deal with volatility. But this also means that a company must question itself in its actions and be open to new approaches.
This hpo webcast
explains what this operating point is all about (in German only).