Quality guru W. Edwards Deming said 40% of most companies is waste.
You obtain full value from the investment you’re already making in your business by reducing waste on four levels:
- Stop Stupid Spending – unnecessary and foolish purchases
- Show Me the Money – collection prevention – working upstream to address issues that lead inevitably to unnecessary receivables
- Process documentation and improvement – efficient, effective work processes require regular monitoring and maintenance – at least
- Reduce employee turnover – average cost to replace a laborer: $3000+ –- average cost for middle managers: 2-4x annual salary – do the math
- Reduce customer churn – calculate cost of a lost customer x number lost per period – frightening
- Maximize return on employee investment – employees probably represent your biggest investment – what if 40% of that investment is waste?
- Focuses on key business processes to provide immediate leverage for improvement.
- Seeks out low-hanging fruit where waste usually accumulates.
- Involves workers and leaders in owning work.
- Incorporates research in a way that’s simple and immediately applicable.
- Targets improvements that ripple through the entire company, multiplying and aligning effects.