By Michael J. Green, BPR Methods
Wouldn’t it be so simple if, as a Senior Manager, you were able to quickly identify and fix, on a daily basis, specific areas of inefficiency, out of control cost drivers or processes that can be changed to improve output and quality? It is not always so obvious where these opportunities lie. Or is it?
Common issues arising throughout the daily grind will give indication as to where the potential lies. Do employees repeatedly complain that something is taking them too long? Do clients continuously call with issues that they need to be helped with? Does your budget contain one or more expense lines that are always over planned targets? Are there daily frustrations you encounter where you keep telling yourself that there must be a better way of dealing with? Yes to any of these questions should be an obvious indication that you have identified an area of focus that needs change. Ah, but my demanding schedule and over-challenging financial objectives just don’t allow me to set aside the time to focus on these issues. In reality, you cannot afford to overlook these daily issues and set them on the back burner until a free moment may arrive to finally address them. Now is the time to act.
So what do I do? To truly understand where the potential lies within your organization, Senior Management must first admit to itself that there is an issue or a set of issues that needs to be addressed. That tends to be the hardest part. Egos, political barriers and organizational bureaucracy hinder this realization and especially the achievement of solutions. I have personally witnessed this for over 20 years. After the realization stage sets in, it comes a time to identify where one can obtain the greatest benefit at the least cost. But those financial goals keep haunting me. Remember, we need to spend money to make money. Sounds like quite the conflict. Well, that’s the nature of business. So, we have identified where the changes need to occur. By change we mean improvement of business processes, reduction of costs, implementation of best practices, improvement of overall financial performance, and helping to maintain customer loyalty. Sounds obvious huh? It is but ask yourself how many Senior Managers actually think of these issues and act on them on a daily basis. Very few.
Statistics show that costs can be reduced by as much as 70% by improving your business processes and revenues can be enhanced by as much as 40% through these techniques. The next stage is to act. How do I do that? You have the option of handling this internally or outsourcing subject matter experts. There are always pluses and minuses to each. An internal team or individuals with the proper experience and drive can sometimes solve these problems. Do they have a vested interest? Are they motivated to improve the organization they work for without direct monetary compensation? Do they have the time to focus on these studies? How long will this take to complete? Do they have the skills and experience to make this happen? Chances are you will not find a yes answer to all of those questions. Hiring outside may be the answer to these issues.
At this point we are hopefully thinking about, and writing down, several daily challenges that have obvious room for improvement. Whether we want to admit it or not, every organization faces these challenges. So how have we divulged how to uncover the hidden potential? Most likely the greatest opportunities are right in front of you. You are probably aware of them already as they haunt you all day, at night and first thing in the morning. We lay awake at night thinking of these problems. Now is the time for solutions and to put the worries to rest. No, not every problem can be solved overnight.
Ask your employees, they know more than you think. Filter out the chronic complainers. Listen to the facts. Look for slowdowns and bottlenecks throughout the organization. What seems to be taking too long and contains too much variability? Review the budgets and expense reports and see where the heavy hitters are. They can be reduced but must be done creatively.
Ask your customers what you can do better. You need them. Look and see what the competition is doing better than you. There is competition and chances are they do something better than your organization. Utilize subject matter experts and the tools they propose and are skilled in. Be risk averse yet realize that risk does yield reward if weighed properly. Finally, act, move, and decide it is time to realize the potential of your organization.
Michael J. Green is CEO & Principal CFO Consultant of BPR Methods, LLC, a firm that specializes in Fractional CFO services to start-ups and small businesses. Mr. Green has 25+ years of business experience in senior level financial roles as well as a background in banking, operations, marketing/sales, and engineering. Mr. Green intentionally authors basic, straightforward, no-nonsense papers focusing on thought provoking ideas and concepts that can be applied in virtually an organization.
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