Remember when your parents said, “Money doesn’t grow on trees” or “A penny saved is a penny earned”? Employees and business owners need to re-visit these truisms. Carelessness, complacency and failing to ask the right questions of staff and customers has resulted in Australian companies paying dearly in both time and money, according to Catherine DeVrye.
In any economy and industry, the only two ways to boost a business’ bottom line are either by increasing revenue or decreasing expense. In the recent global credit crises, increasing revenue has proved somewhat of a challenge, so businesses have refocused instead on the second option.
Yet cutting expense cannot be effective if a business is repeating the same mistakes. Over the years, I’ve witnessed companies across varying sectors and industries waste their valuable resources following an identical pattern. I can now sum up the seven most common ways they do this.
1. We have always done it that way
Companies, small and large, seem to be immune to considering alternate methods of doing business that may save them money. The phrase ‘we have always done it that way’ is costing companies money without necessarily adding any value to their bottom line.
For example, an airline that took the suggestion of a flight attendant and stopped serving the lettuce garnish with the passengers’ meals saved over $1.5 million over the course of a year, without making any significant difference to their clients’ experience.
2.Carelessness is a common culprit
The second most common way that businesses lose money is through general carelessness during the course of the normal working day.
The cost of wasted materials and the time cost of re-work is a huge factor in most organisations.
This can be very simply solved by taking a moment to check that the letterhead is loaded the right way up in the printer before printing multiple copies, for example.
3. Seek alternative quotes
Further to this, companies are not bothering to seek alternative quotes from suppliers, and simply continuing to do business year after year with the same supplier. Once again, it’s sometimes too easy to rely on that same old excuse, ‘we’ve always done it that way’.
Loyalty is important but long-term suppliers often become complacent, so it is a good use of time to occasionally get a couple of alternative quotes and ask your existing supplier if they can meet those.
Be careful not to spend countless hours trying to save a few cents, as your time is also valuable.
4. Recruit the assistance of your staff
Seeking the opinion of both employees and customers is vital to ensuring quality is kept while dollars are saved.
Allow every staff member to realise it is not the boss but the customer who pays their salary, and encourage them to contribute solutions to cost-cutting.
5. Involve your customers
Furthermore, as it is your customers who are keeping you all afloat, get their input as to where you could rather be focusing your time and money to provide them with the best service. For example, do you over service by excess packaging, or sending clients a 20 page report when they really only need a three page one?
6. Meetings overload!
Bureaucracy can often contribute to time and money wasting.
Consider whether you need two people in the meeting, five or a dozen? It’s not often likely to be the latter and there seems to be an inverse relationship between the number of people present and a successful outcome.
7. Use eco-friendly solutions
Finally, companies waste valuable resources and cost the economy dearly by refusing to consider eco-friendly solutions, however simple or trivial they may appear.
Eco-friendly is more often than not also economical. I always share a story told to me about 20 years ago by Paul Cotton, the then New Zealand Consul General.
He told me that he had never spent a cent on the purchase of paper clips. He said he figured that as many paper clips must come into the office as go out of the office so he insisted that staff remove them, prior to throwing the paper in the bin.
Just like Mum often chastised me that money didn’t grow on trees, likewise… paper clips don’t grow on trees!
Tough economic times offer a great incentive to eliminate waste and stimulate value. What is your business doing to boost its bottom line?
- The 7 most expensive words in any organisation are: ‘We have always done it that way.’
- Avoid re-work. ‘Measure twice, cut once.’
- Ask suppliers to sharpen their pencils and get alternative quotes.
- Ask customers. Listen and learn as perception is reality, and packaging often useless.
- Encourage staff suggestions as part of the solution.
- Bust bureaucracy and eliminate meaningless meetings.
- Eco-friendly can also be economic!
Catherine DeVrye is the author of 8 books translated into over a dozen languages, including her latest, Paperclips Don’t Grow on Trees. The former Australian Executive Woman of the Year & current Keynote Speaker of the Year addresses audiences on service quality & managing change. www.greatmotivation.com
Image by DaveBleasdale