Eliminate work and increase profit, that just doesn’t make sense…..
Strangely enough, it makes a whole lot of sense. So many people focus on streamlining processes, when one of the first things you should ask yourself is whether or not the work itself is even necessary.
Take the time to have a think about how much incoming work is taken for granted, just like any other habit. It continues day after day, week after week, year after year….why….because that’s the way its always been done. Sometimes that incoming work is not necessary or even worse can hurt the business. If that’s the case, why should you be even doing the work in the first place.
I’m confident you can to identify a number of tasks that just “shouldn’t be done”. This is the real world and it’s not quite that simple. For example, let’s take a classic sales environment, it’s quite common to see sales representatives measured on the quantity of sales calls, with no regard to what constitutes a sales call in the first place…or….incentive programs that focus on top line revenue with little regard to actual profitability. You can easily picture what behaviour and resultant work this creates.
The actioning of wrong work (for one of a better term) is not the only thing to look out for. In addition to this, we must consider “re-work”. That is, work that is performed but should never needed to be done in the first place, should the actual work activity be done right or in an effective way in the first instance.
There are 3 types of incoming work that we should aim to not need to do or accept at all:
1. Work related towards undesirable products, services and customers.
2. Work related towards service recovery and issue resolution.
3. Work that relates to non value added work activities.
How do we go about increasing our profitability then?
If it ain’t broke….
don’t fix it!! …improve it!!!
The first and most important step is to stop….think….and if the work shouldn’t be done in the first place, break the habit and learn to just say no!!! – at least long enough to test the necessity or value add of the work activity.
What’s the value of printing the form when it doesn’t really need to be printed? Why continue to promote an expensive and clearly unprofitable product line? Why service invoice enquiries better when we could render a better invoice to eliminate the majority of the enquiries?
To increase your profits, have a think about:
- Eliminating some customers (yes, its contentious): uncover and minimise doing business with undesirable or unprofitable customers or even unprofitable transactions
- Remove some products or services: review your products and services. Are you offering products or services that don’t align tightly with your business or are simply not profitable?
- Stop doing the non value adding or unnecessary work activities. For example: Could you reduce workload through less issue or issue-resolution related work? Is there a way to reduce the frequency or remove all together the need for inspection related activity? Is it possible to reduce or remove work activities that relate to setting up, moving around and/or storing?
Technology innovation can greatly assist with automating and streamlining processes. Let us never lose sight of the fact that it’s often far more profitable to not do the work at all (if its unnecessary or doesn’t add value) in the first place.