Economic uncertainty forces small business owners to make changes. For some it’s a matter of survival. But change does not have to be a bad thing. In fact, companies potentially can save thousands of dollars without eliminating a single employee by modifying the way they do business.
Jim Paluch, president of the consulting company JP Horizons, shared that message with attendees as part of the Smart Strategies for Growth – Working Smarter with Lean Tools Webinar sponsored by Weed Man.
Paluch’s message was clear: Companies can increase their capacity to serve by taking small steps to eliminate waste. By developing employees, companies can bring about change that adds value to its customers while saving money at the same time.
“It starts with developing people,” he said. “Make a good strategy – a strategy you can start using. (Ask yourself), ‘what is the simplest way we can improve blank – sales processes, productivity, the time it takes to process a contract or invoice.’ Think in terms of little improvements.
“Think about what lean is. People think they know all about lean but that’s such a wrong vision. Lean is about doing things in the least waste way. No one has ever lost their job or position over lean (management).”
The first step to eliminating waste is communication, Paluch said. Management should meet with employees on a weekly basis to discuss the process in which tasks are completed.
“(You need to) get together and work on the process,” he said. “Be soft on people and hard on the process. It’s easy to say, ‘Why are you doing it that way?’ when you’re not involved. That’s your challenge – to take the time to learn how to observe, learn how to see these processes that are costing us money. Step back and think through with your organization (and ask), ‘What are the processes we can fix?”
Through regular meetings, management will begin to see changes in employees, Paluch said.
“You’re role as a leader is to develop people,” he said. “We’re building people, creating great, energized people that are getting the focus and clarity about what their purpose is and they’re starting to follow through with that.”
And the results could yield dramatic savings. Paluch used the Lexington County Club in Fort Myers, Fla., as an example. After a year of weekly regular meetings between management and employees, the company was able to make small changes that yielded a savings of more than $845,000.
One of the things the company reorganized was the labor to do invoices, he said. After reviewing and reworking the process, the country club was able to do the job with one less employee. The restructuring allowed management to put that person on another job, which eliminated the need to hire additional staff.
The company also organized its maintenance crews and reduced the morning start-up time for them to get on the golf course and other areas they managed, Paluch said. As a result, the savings in labor hours were about $100,000.
“Working smarter isn’t about cutting back,” he said. “It’s about increasing our capacity to serve. We’re improving the quality of life when we’re working smarter. We’re earning more, and over time the resistance diminishes and we can work on everything else.”
With the state of the economy, Paluch noted, its imperative for companies to begin the process of lean management. The results may be the boost they need to survive.
“We know the only way we’re going to prosper in this type of economy is by looking at ways of doing things differently,” he said. “We need to get rid of the question mark and truly bring in a strategy that’s going to make a difference.”