Wednesday, August 5, 2009

Low Cost - High Impact

One of the key features of Khairy Jamaluddin’s new leadership in Pergerakan Pemuda UMNO, I am told, is a novel discipline of how proposed programs are manufactured, evaluated and selected – and that is referred to as “low cost – high impact”. It’s a familiar term or glossary deployed by business leaders to gain the equipoise of maximum asset’s utilisation rate that delivers high impact result with the least possible spending.

The workings of the new approach can be summarised by the diagram above, of which;

[1] Yellow block represents low cost-low impact programs
[2] Red block is for high cost-low impact programs
[3] Blue block embodies low cost-high impact initiatives
[4] Green block stands for high cost-high impact activities

Strategies that correspond to the aforesaid shall be as follows:

[a] To improve the impact of low cost-low impact activities, to the Blue segment area: eg, D to A
[b] To avoid Red block activities that only yield low impact and yet financially burdening: eg, E
[c] To creatively think on how to enhance spending-productivity of the Green segment to the Blue segment, whilst maintaining its high impact: eg, C to A
[d] To improve current positioning and result of Blue segment activities: eg. B to A.

The ideas behind it are numerous and include:-

[i] A reform agenda. To explain this point – a BAU or Business As Usual situation would mean that activities that fall under Green Block would gain the advantage of leadership approval. However, the present approach involves leadership challenge in the form of thinking on how could the same initiative be implemented with lesser cost.
[ii] Productivity driven thinking, be it in resource management as well as on programmes’ impact.
[iii] A more selective and focussed orientation for high impact as well as low cost spending. That shall be the rule of thumb - nevertheless, due considerations would also be given to certain programs that fall under Green and Yellow blocks, on case-to-case basis.

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