Posts Tagged with “management”

How You Can Save Your Company $2,000,000 in Just 5 Minutes

In my last article, I wrote about kaizen, a Japanese business philosophy of constant improvement. I’d like to follow up on that discussion with a brief demonstration of how even seemingly small changes can have a huge effect on your business.

How can you save your company $2,000,000 in just 5 minutes? Follow along to see how.

It takes my laptop 14 minutes to startup. That’s from the moment I press the power button to the time I am able to launch my first email in Outlook. Even if you subtract for XP itself, that’s a long time. I am not your typical user: I defrag my machine often, explicitly shut off non-essential services, map only one network drive, have wifi explicitly disabled, and put nothing in my startup folder except for the aforementioned Outlook. Oh, and I’ve done most of the recommended tweaks to get XP to boot faster. So where does the rest of the time come from? All the stuff my company does to make sure my laptop is secure, has its updates, and whatever else is in the standard image.

Don’t get me wrong, this is important stuff and I support it whole-heartedly. But consider this, what if a VP walked over to the IT department and said: “Guys, find a way to shave 5 minutes off the system boot times while keeping the systems secure and I’ll pay you a $5000 bonus.” Watch how fast those minutes disappear.

14 minutes. Big whoop, right? Chillax, press start, go grab a cup of coffee, and when you come back you’re ready to go. Okay, smart guy, what if I’m in the middle of a critical 30-minute meeting with the CFO and my laptop requires a restart? ‘Cause that never happens on Windows, right? So there goes half my meeting there.

What would happen if IT just shaved off 5 of those minutes?

  • Average Salary in the United States: $44,000
  • Per hour that works out to (40 hr/week, 50 weeks): $22
  • Per minute that is: $0.37
  • For 5 minutes: $1.85
  • For the year (5 min/day x 5 days/week x 50 weeks/year): $462.50
  • For a company of 5000 employees: $2.3M

That’s what 5 minutes means. Backup for a second, Serge, that’s great for large companies but what about smaller companies? Okay, take a 25-person outfit, with an average of $15/hr:

  • Cancel one unnecessary 30-minute meeting each month ($2250)
  • If half are parents who usually leave 15 minutes early to pick up their kids, provide onsite daycare (still at the employees’ expense) ($11250)
  • Save 2 minutes by reducing just 5 emails ($3000)
  • Provide computers that boot just 1 minute faster ($1500)

That’s $18000 right there.

Yes, yes, it’s a bit of a leap to say that this saves the company in real terms because you won’t actually see that in the bottom line. Okay, so quantify for me how much work-related stress does cost the company. What are the recruitment and training costs of retaining and having to re-hire talent due to attrition? What is the value of being recognized as one of the best companies to work for? Measure for me the lost opportunity costs of all those minutes added up when said employees could be working on other things in a state of peace and tranquility.

That is the point of kaizen. A relatively simple idea of reducing the amount of time it takes for a computer to restart can create a culture capable of constant improvement. This is the type of environment that nurtures employees who will think of that huge cost savings or that next multi-million dollar revenue stream.

Have time-saving ideas for your company? Share in the comments section below. Play around with the Kaizen Calculator to see how much your company could be saving.

Oh, and you probably could have read this article 8 times in the time it took me to restart my laptop.

Kaizen, The Japanese Art of Continuous Improvement

It seems I’ve been thinking a lot lately about my time in Japan. Usually it comes about when I’m thinking about technology or gadgets. But lately, I’ve been reflecting a bit more on Japanese culture and specifically the culture of the workplace.

In the early 1980s, Japanese business was the dominant global player, easily trouncing the US and its western brethren on profits and efficiency. The seemingly impossible advances and pace set by the Japanese automotive industry and electronics manufacturers became the blueprint that many companies tried desperately to duplicate.

In fact, many modern practices in business find their roots during this period of business growth and change. During our current period of economic difficulty, business uncertainty, and low employee morale, I’ve been thinking about one practice in particular:

kaizen (改善) – Japanese for improvement; comes from the words kai, meaning to change or break and zen, meaning good or better

Kaizen is a system of employee-driven suggestions to improve every aspect of the business. But even this definition falls short. Kaizen is a state of mind, it is ingrained in Japanese business culture. It asserts that all employees are responsible for the quality and profitability of a company. Masaaki Imai is known as the father of Continuous Improvement (CI) in the workplace and recognized as the inventor of kaizen. This practice of employee suggestions dates back much further though, when in 1721 the shogun Yoshimuni Tokugawa issued the following proclamation: “Make your idea known. Rewards are given for those that are accepted.”

Focus on the word “accepted.” In the West, we tend to reward ideas that are “implemented.” In Japan, merely making a suggestion is met with a reward, albeit a very small financial one (something like $5 per idea). A large reason why suggestion programs tend to fail or are ineffective is this emphasis only on ideas that are implemented. Management has the most significant impact on whether an idea is actually implemented, and yet the individual employee only gets recognized (rewarded) if Management actually does something with the idea. Pretty soon, you train the employee to not bother.

Yes, yes, we can talk about establishing programs that empower the employee to take action, but that will be the subject for another article. I leave it for now with the assertion that such an approach is all well and good, but it has to start from the top, from defining the system, allocating the budget and time, and actively engaging in the program. This is one instance where “delegating” or “empowering” downwards is a bit of a cop out.

The Employee Involvement Association (EIA), formerly known as the National Association of Suggestion Systems (NASS), reports that the average employee suggestion returns about $7000 to the company in profit or savings. In the US, the implementation rate for employee suggestions is about 35%. In Japan that number is more than 70%. The total savings/earnings for companies and state agencies which have employee suggestion programs is in the billions. That’s billions with a “b.” Yet only 3% of companies in the US even have a suggestion program. Successful and sustainable ones are a fraction of that.

There are many spectacular stories of employee suggestions–American Airlines bought a Boeing 757 from the $55M in savings its annual IdeAAs in Flight program delivered–but thinking small in this instance has another positive effect…it creates access. From the Managing Director all the way down to the housekeeping and maintenance staff, anyone can submit an idea. A Managing Director may not be bothered with $5, but a janitor will submit tons of ideas if it means it’ll pay for lunch. Shoot, I’d submit an idea every single day!

Consider what just a few of the following ideas might save your company:

  • switch to mugs instead of disposable coffee cups
  • change to long-life lightbulbs
  • change printer defaults to double-sided printing
  • meeting moratorium Fridays
  • onsite car wash (vaccinations, oil change, etc)
  • workplace dry cleaning and laundry delivery services
  • onsite child daycare

Do any of these ideas directly impact your product or service? Probably not. But ask your COO or CFO if they care about their impact on operating margins (they will). Also consider that these handful of suggestions alone mean employees can focus on their work instead, which does impact your product or service. It also instills a culture that every employee has a chance to make a difference and it encourages creativity, which will translate in the way your employees approach their work.

Estimating the impact of such a program on morale and employee retention is extremely tricky and not likely to convince Management on the value of the program. So let’s say such a program retains just one employee. One single employee. I don’t think you’re asking anyone to make too much of a mental leap in accepting that this sort of program could save one employee. Estimating very conservatively, the cost of interviewing, hiring, and training an employee would easily be $50,000. For $50,000, you could fund 10,000 ideas (at $5 each). If ideas average about $7000 back to the company, that’s an additional $70M. Not bad for a $50,000 investment.

Here’s my proposal, start an employee suggestion program at $5 an idea. Reward implemented ideas with an additional 0.5% of the total return back to the originating employee. Don’t be greedy, give a half percent back to the employee. You’d rather have 100% of 0? (that’s still zero) Or would you rather have 99.5% of the more than $2B which came from employee suggestions last year? (that’s still $1.99B).

This post was inspired by an article forwarded to me by one of my team members. Thanks for jogging my memory, K.

Make Your Manager Obsolete…and More Relevant

One of the greatest lessons I learned from a mentor was to work towards making your Manager “obsolete.” A lesser Manager may feel threatened by this, but a great Manager understands that this allows him to focus his attention on larger, more important challenges and frees him to pursue his own career and personal development. In practice, what this means is that for every 1 thing you bring to your Manager, let there be 50 other things you did not need to. It encourages self-reliance, creative problem-solving, and holds you accountable for making sound decisions.

There are smart and less than smart ways to go about this. Firstly, you must assess whether this is a philosophy that your Manager embraces. Ensure that you are not overstepping any boundaries. A productive way to do this is to simply ask your Manager if there is anything you can help him with. Maybe he needs someone to polish up the formatting on an important presentation, maybe he needs someone to proofread a resource planning map, maybe he just needs someone to track down a few folks and setup a meeting. Approach each of these tasks as a learning opportunity. At first these may seem menial or trivial tasks, but each thing that you do for your Manager exposes you to valuable skills you can develop. That assignment formatting his presentation? Perhaps it will be a talk about strategic goals or an operational review of group performance. That resource planning map will teach you the mechanics of the organization or perhaps how to balance and prioritize personnel. That meeting might just introduce you to other key Directors in your division or score you an invite to listen in and take notes.

Strive to be the last item on your Manager’s worry list. Managers aren’t stupid, they know how much effort goes into the assignments they hand to you. Delivering a challenging task with barely an incident speaks more volumes about your abilities than a brash display of heroics. Save those heroics for true times of crisis. If you’ve established yourself as the most effective person on your Manager’s team requiring the least amount of direction, then you will become your Manager’s first choice for those really juicy assignments. No Manager likes a high-maintenance employee.

Don’t confuse helping your Manager with “replacing” your Manager. This sets up this scenario as something more threatening, more subversive. Perhaps this also stems from a weakness in using the term, “obsolete.” Obsolescence implies a thing as being defunct or no longer in use. So instead I suggest the term “relevant.” When you help your Manager avoid getting pulled into every little decision, you are giving him the gift of time. A great Manager will use this time to figure out ways to help you grow and be more effective. A great Manager will use this time to pursue and create new opportunities for his team. A great Manager will use this time to think about and drive initiatives that help the Company and its Customers be more successful. In short, he delivers greater value and becomes more relevant to your organization. By extension, you increase your relevance because you are delivering on your commitments, developing your skills, and establishing your invaluable contribution to the team.