Cost Cutting and Performance Excellence Methods Go Hand in Hand
Advice from Joe De Feo, President and Executive Coach
The current economic picture looks gloomy for many industries in the US. We are faced with a slowing consumer demand, a housing crisis, and a Presidential election. If your organization is being hit hard by these issues - do not fear. If you are a performance improvement expert - do not fear. Why? Because as a performance improvement expert you have learned to speak the language of leaders. That is the language of money. During economic downturns many enterprises cut back on spending, training, extra travel, and sometimes even services that customers expect. If your organization is doing this you may be able to help.
Consider applying performance improvement methods such as Lean and Six Sigma directly to reduce costs and improve customer demand to help your organization get on the right track. If your training budget is going to be cut and executives are cutting back on your improvement teams then you need to modify your plans.
Here are some tips to do that:
- Convert the process problems into the total dollars that will be saved in the immediate quarter or year if you can improve them. If you cannot do that, postpone the project until a better time.
- Adjust your improvement methods to fit the times. You may need to launch smaller, more direct hit, Rapid Improvement Events or small scale LSS projects. Break large projects into small parts. No executive will support projects that will not save money right now.
- Consider focusing on small teams of 3 to 4 people with an experienced expert facilitating them. Consider working each day for 90 minutes on each project rather than 2 hours per week. This will build momentum and get people excited.
- If your customer demand is down - learn why. Understand why. If demand is down due to customer dissatisfaction then you must focus on improving the issues that cause the dissatisfaction. Often, internal scorecards do not tell you why sales are down. Do not assume anyone really knows why. Get the data and interpret it.
- Use Lean methods on cycle time, throughput, or delay problems. Do not use Lean Tools as a replacement for larger projects or problems that need in-depth analysis. Lean and Six Sigma are complementary, but they are used on different types of problems.
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