Brewed Fresh Daily

"When Lou Gerstner became chairman and CEO of IBM in 1993, he forced significant cost reductions in the company's Nobel Prize-winning research division. Budgets were slashed to 37 percent of 1990 levels; payrolls were cut by 28 percent. The entire infrastructure of the research department was dismantled, leaving the staff to worry about their long-term prospects. Before long, however, Gerstner's 'resource ruthlessness' translated into new efficiencies that quickened the pace of research and increased the commercial value of the subsequent products." According to Jason Jennings and Laurence Haughton, authors of It's Not the Big that Eat the Small�It's the Fast that Eat the Slow, resource ruthlessness enables businesses to achieve and maintain speed. This concept mirrors the "creative destruction" model of Joseph Schrumpeter, an Austrian economist who pointed out that market forces and new technologies unleashed a cycle of innovation that destroyed old methods of operation and led to new patterns of growth..."

posted by George Nemeth  # 11/04/2002 08:10:00 AM