Imagine for a moment what your company would
Here are sixteen myths, secrets and pieces of insider’s
information about cost reduction and profit improvement that will
help you succeed in maximizing your profits.
Are these true or not and what are the secrets to success?
profit initiatives are impossible to achieve. World-class profit improvement results are difficult to
achieve but not impossible.
See what it takes to have world-class standards with this
easy to take free on-line evaluation. It
will give you a list of what characteristics define world-class
programs are the way to go to reduce costs and improve profits.
There is no doubt that employee
suggestion programs can play a key role in the communication
structure of an organization. They
do not however tend to produce large or sustainable increases in
profits. Studies show
that participation in the US tends to be very low.
Build structure and process around a profit-focused system
to maximize success in both the short and long-term.
3) Myth: Employees always volunteer their best ideas.
Employees will volunteer ideas until they run into the usual
barriers to innovation found in most organizations such as
criticism, lack of opportunity, lack of support, and other
actually takes a significant amount of training to diminish the
impact of these barriers and provide employees with the tools for
Myth: It costs a lot to engage a profit expert. The
reality is that a good profit consultant will help you accelerate
and expand your profit growth beyond what you can do on your own.
Yes, a Six-Sigma program takes about $250,000 and six months
just to get started at a small company but you can do a lot better
with the alternatives.
Secret: Consult with any potential consultant in
advance of engagement. A good consultant will discuss your needs and opportunities in advance with no
obligation to give you a good idea of what you should do.
Business Solutions – The Positive Way will even conduct a
preliminary two-day Power Idea Session with your key staff that is guaranteed to
produce at least $50,000 in profit projects.
This session will make you money while you evaluate your
options. What a deal!
costs to improve profits will hurt sales.
Actually this is NOT a myth!
A focus on cost cutting invariably will hurt sales. It is almost impossible to keep the up enthusiasm and spirit
that are absolutely necessary to revenue growth when all you are
doing is cutting and cutting.
balanced approach with a view toward all three elements of the profit equation (revenue,
expense, and loss) will not only safeguard profitable revenues but
will help you build additional revenue streams as an integral part
approach builds enthusiasm and spirit to build a positive outlook
for the future.
Myth: If an
idea will save a lot of money or make a large contribution to
profits we should just do it no matter what.
It is a mistake to
make cost reductions or other major changes without carefully
evaluating the impact against the criteria that are important to
your organization. The
end may not justify the means.
A cut may look good for the moment but damage the
organization later…as many corporations have found when they cut
too many people in reengineering programs only to stunt their future
growth and profitability.
Establishing clear criteria for cost reduction and profit
improvement that are consistent with the overall objectives of the
company can keep you on track with both growth and profits.
This is an integral part of the Profit
Improvement Process. Test your knowledge of what
really qualifies as a profit improvement idea. Is
that gold or fools' gold?
Myth: All we
really have to do is tell our managers to cut costs. There is no
question that properly motivated and led managers will do their jobs
to the best of their abilities and you will make progress.
The reality is that they will run into a brick wall sooner or
Secret: Providing your leaders with tools
will empower them to go far beyond where their innate abilities and
experiences will take them. It’s
like everything else; people with training, practice and skills win.
informal program is just fine.
usually do generate some savings but they tend to miss less obvious
opportunities and slow down.
You don't even know what you're missing.
Secret: Continuous success comes from well run Profit Improvement Processes that fold into
the culture of the organization and become a natural part of
everyone's objectives. Improvements build on each other to enable unforeseen benefits.
Further, formal programs ensure that opportunities are
evaluated for fit with corporate culture and needs.
cost will have a negative impact on quality.
A well-run cost reduction program uses your quality criteria
as a measure of what changes can and should be made. Quality should improve
when you remove the costs of low quality, as will costs and margins.
Quality and profit improvement programs are synergistic.
Continuous Improvement Programs can combine the elements of
cost and quality.
Secret: A focus on the cost of quality (loss) as a
part of the profit
equation in a Profit Improvement Process will ensure that
quality improves along with improved margins.
for-profit organizations will benefit.
Even not-for-profit organizations can greatly benefit from a
well run PROFIT IMPROVEMENT PROCESS.
Organizations that control their costs are able to use more
of their resources to deliver the services that they are charted to
contributors as well as consumers appreciate efficiency.
Expense ratios are often used as one measure of an
of all kinds that use Profit Improvement Processes are generally
more efficient than those that do not.
Use a Profit Improvement Process to make sure your
organization is not-for-profit on purpose.
large companies will benefit.
Processes are ideal for even smaller organizations that do not have
the staffing to implement more pervasive and dramatic systematic
change systems. Profit
Improvement Processes are a great way to start organizational
You can build a program that will meet precisely your needs
that fits the size of your company.
Use something like the Profit
Improvement Process that is flexible enough for companies
from $10 million to $10 billion in sales with a cost/benefit ratio
Improvement Processes only work for manufacturing companies.
Any operation that
has an expense structure can benefit from a Profit Improvement
Process. They work everywhere
where the participants and stakeholders can accept them.
A well-designed and flexible process can apply in any type of
business. The key is
to fit the process and the tools to your needs.
Programs have to be complex: Even the largest
organizations can benefit from simple Profit Improvement Processes.
Programs are tailored
to the culture, size, and complexity of the organization.
Simplicity of process
is a key to the ability to install and maintain an initiative over
the long term. There
are a number of different approaches to consulting and programs
Speed in profit growth comes from getting a quick start.
This is actually true to some extent but with real
limitations. It is true
that delay can be deadly. On
the other hand, progress is usually determined by how well the
initiative is structured and managed.
Training and education are critical to success but these are often
left behind in the need for speed.
Plan for them to happen as soon as possible.
We can start with just middle management support.
The reality is that a lack of top management support is the
number one reason for failure of any initiative – including cost
reduction and profit improvement initiatives.
Top management must be engaged.
It is best to engage them from the start.
But, given no alternative, try a test in a single department
or business unit with a plan of using the demonstrated results to
win over top management. A
flexible and skilled consultant can help you do this.
Programs must be fully installed before they produce results:
Not infrequently, the program will be started with a core team or
representatives from selected departments and skills.
That team will focus on target areas and refine the process
while creating savings. Once
the process is working, they can help lead the broader effort.
Secret: Jump-start your profits. A trial program can be a great way to start on the road to success.
Pick one department or business unit as a place to start.
Or, try a Power
Idea Session with a group of your decision-makers to get a
preview and make $50,000 or more in profits at the same
Profitability Information Request Form