Saturday, December 29, 2007

New Year's Resolution for Management --> CUT COSTS IN 2008--> NOT PEOPLE

Enough already, it is time for Management to start earning their money in 2008 by developing or innovating ways by which to improve the bottom line by cost cutting as opposed to cutting their number one asset --> people.

You hear it almost everyday – a company laying off part of its workforce - to improve profitability or as the last resort to stay in business. Why does it reach that point? Why do leaders resort to this method? Why can’t companies reduce costs without getting rid employees? The answer is they can. But it can’t be in response to short-term thinking or a crisis. It must be hands-on approach. Cost cutting must become an on-going objective that is as important as any other Accounting or Finance effort.

It is so easy and shortsighted to cut employees regardless of what Management will tell you or what you read in magazines and newspapers. So-called leading experts from business colleges do studies and research on the best ways to remove people from the bottom line with little impact on the organization. They are full of crap and when they do instruct they fill the next generation of leaders and managers with the same crap. It has been going on for years, I am a product of that schooling and I’m just lucky I found the teachings of Dr. Deming to help set me straight in 1980.

I have personally been involved and had to make decisions as to how many and what employees should be let go. Each and every time I fought for other ways by providing examples of other companies, ideas and probable solutions other than cut people. The problem with my input was it took too much time according to other decision makers and the charge to get rid of heads was to be done soon, quickly and above all quietly. Do not let employees and the most feared of all “The Press” get wind of what was in store for the company. Again, a bunch of crap, “GUTLESS” is the optimum word for these type of managers and leaders.

It’s a new year so let’s move on …

I’m not going to go in to the traditional Cost of Poor Quality – see my post at

What I propose to do for 2008 is to form a cross-functional team that represents all departments under the “active” leadership of a decision-making Vice President.

The type of cost cutting will be Discretionary and Headcount related (not cutting employees but may involve different jobs, movement, reporting structure, etc…).

Spreadsheets should be developed that list items along with the following categories/columns:

Owner, Category, Idea, Q1 Q2 Q3 Q4, Probability of Achievement (%), Savings Per Month
EOY Savings, Description, Tracking Number, Department Manager, Department Rep Go /NoGo, Data Status (green, yellow, red), Org Dependency, Doability (yes/no).

The following are some of my examples and ideas that if looked at closely can save a company large amount of dollars and not lose efficiency or effectiveness of operations. Some may seem harsh but I’m betting the majority of employees (don’t say NO until you ask them) would rather keep their jobs with some signed assurances and agreements with the leaders of the company.

- Freeze all Salaries (until you no longer have to cut people)
- Renegotiate and cancel consultant agreements (trust me, you have the knowledge inside your company, look for it, use it, trust your people)
- Your employees will always make better company decisions than 99% of business consultants out there. Why – because they care and LISTEN!
- Reduce and Scale Down Company Picnics and Parties
- 2 Week - Month Vacation w/o Pay
- Giving up monthly Reimbursement Perks (i.e., phone cost)
- Use Internet as source for cheaper fares (car, plane, train) and hotels (cancel contract with travel agencies)
- Turn in all unnecessary pagers and cell phones
- Revisit who needs cell phones and update cell phone plans to best provider
- Reduce Travel Per Diem allowance unless dining with customers
- Discontinue company-paid annual dues for professional organizations.
- Give employees the option to work 37 1/2 hour workweeks, which allows a 20% reduction in salary. Work in combination with flexible work arrangements
- Discontinue funding for all Business Resource Groups (including registration for annual conventions, travel fees and annual gala balls
- Remove unused and outdated Telephones and Lines (computer, fax)
- Renegotiate supplier contracts to single-source suppliers
- Remove all copiers (and contracts) and use local printers
- Return all unused equipment to vendors and free up space
- Reengineer Work Stations to save on space (sell or lease free space)
- Carefully look at an effort to move towards virtual office to realize real estate cost savings
- Re-negotiate cost of leased space (if applicable)
- Cut out goofball training by consultants
- Prioritize work place upgrades (i.e., cafeteria, gyms, conference rooms)
- Change Sales Compensation Plan to pay at in-effect with additional incentive for Sales to sell high margin
- Revisit Procure staff guidelines / Processes / Contract. Too many mistakes occurring and nothing can be corrected and we company is paying for the consequences

- Cancel Coffee and Bottled Water Contracts

The above items are just the beginning … Cmon do something good in 2008, don’t punk out and take the easy management way. Please don't contribute to "The Demise of American Management."

So in 2008, "Stop complaining about poor performance of employees, and start worrying about the poor performance of management."

Friday, December 14, 2007

The Holiday Season is a great time for "Creating Customer Loyalty" with KANO Analysis

The holiday season is a great time for attracting and keeping new customers and encouraging their loyalty!
So how should a company create customer loyalty?

Define Quality
Anticipate Needs
Absolute Customer Focus
Voice of the Customer
Delight & Wow
Service Quality
Where every Customer is Treated
Like the First!

Getting Customers: During the Holidays most of your potential new customers come to you! So how do you keep them for the long-term?

Keeping Customers: Creating a mind set for delighting your customers, not just solving their problems, but going beyond to anticipate their current and future “Latent” needs, to WOW them with customer, technical and process services that they didn't even know were possible.

Keeping Customers: Your customers have the dollars and you must continue to figure out new ways on how to get it and keep it coming by giving them no reason to leave.

KANO MODEL - click on diagram to Enlarge

You must not lose sight of the fact that your customers (int/ext) are the most important judges of your quality, not you!


Q - Then why do companies do just the opposite?

A - Greed and Short-Term Thinking.

It’s actually very easy to figure this out, after all companies stock up on seasonal workers (many are customer facing) who have little or no background in customer service and the fact most companies have little or no standard procedures that can be done in a short time frame with long lasting effects.

You get what you pay for and that is workers who just are there for holiday money and could care less how they represent your business (sad but true, sure they don’t intentionally do things to make customers mad, they have no idea on how to make them happy and loyal.)

Another example of “The Demise of American Management”

For more examples on Kano Analysis go to my post @

Tuesday, December 11, 2007

If our educators are so smart then why don’t we go to school all year long?

I have written about this subject a number of times over the past two years. It never gets the attention it needs or the news stories to supplement the ways to improve our educational system. Is it the only solution? Of course not but it is one probable solution to a broken down "Baggy Whip" of a system. Baggy Whip = Antiquated.

Human behavior does not like change, especially if it requires someone to change a lifestyle that is rich in tradition even if it has served long past its worth to society.

If our educators are so smart then why don’t we go to school all year long?

I was once asked a few years back if I could do one thing to improve our educational system in the United States (specifically in Michigan) what would it be?

I would require the school year to be all year long with additional weeks off around Holidays (Memorial Day, Fourth of July, Labor Day) that are traditionally in the summer months. Summer classes would be used for outdoor learning when possible in the sciences and vocational studies. Use the summer months for some real hands on learning to support the theories taught during the traditional school year.

This would increase the amount in time in school by approximately two months for a total school year of 10 months.

Education needs to be a life long learning that should take many forms and varieties. Having three months off in succession is a serious disruption in the learning for any type of process known to man.

All you naysayers leave all your counter arguments and tap dancing tickets at the door, you folks who still want eight months of school have had the floor long enough with your band-aide solutions. Move away or be prepared to get pushed of the dancing floor.

Another example of "The Demise of the American School System."