In the past couple of years, I have had the opportunity to work with my mentor and friend Thor-Philip Hauge who introduced me to a new business model which he called ERIC (Eliminate, Reduce, Increase and Create). I would like to use today’s article to share some insights from this model with you. The business environment is rapidly and constantly changing so we need to approach it with a clear business model. The ERIC model works with the understanding that resources are limited and opportunities are available for us to exploit by working with our current means in order to be able to eliminate and create or reduce and increase certain activities or things in our business interventions.
It is certainly not possible to have everything as a priority since resources are limited. This implies that an organisation should work with a proper business model in order to be able to set the right priorities. Everything may be important, but not everything is a priority so by using the ERIC grid a company can be in a position to determine what to eliminate, reduce, increase or create for continuous progress. Using the model any business or even a non for profit organisation can cause fundamental changes in the organisation to reduce wastage while at the same increasing resource utilization and creating new opportunities.
In today’s business environment, companies must use the best approach to ensure that they continuously reduce their costs while at the same time creating and increasing revenues. The ERIC model can be of great help for this purpose using the four elements as follows:
Eliminate implies that the company should seek to do away with activities, things or processes that do not add meaningful value to the organisation so that it is possible to use those resources to create new things that could add more value. Furthermore, in order to be able to increase certain activities or things, the organisation needs to reduce certain activities or things especially since resources are limited.
The organisation can go through an exercise to generate the things which need to be eliminated, reduced, increased or created. This will make it possible for the organisation to enhance its performance and focus on things that can yield the best results. Over time it is possible for the company to get involved in doing so many things that do not add value so the ERIC model is a good tool to use.