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Profit Building Profit Building Presentation Transcript

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  • Profit Building Cutting Costs Without Cutting People AUTHOR: Perry J. Ludy PUBLISHER: Berrett-Koehler Publications Inc. DATE OF PUBLICATION: 2000 NUMBER OF PAGES: 162 pages Book pic
    • How to organize teams with the specific purpose of improving profit.
    • Involve employees in the cost reduction strategy and let them actively seek creative ways to cut costs and keep their jobs.
    • The real bottom line – everyone builds profit.
    THE BIG IDEA
  • What Managers Should Know About Cutting Costs and Improving Profit
    • First, there must be a Profit-Building Team composed of people from different departments.
    • Second, a framework for asking all pertinent questions.
    • Third, Brainstorming for appropriate solutions.
    • Fourth, Action steps must be taken.
    • Fifth, Review and follow-up.
    Cutting jobs must be seen as the last resort in any enterprise.
  • The Profit Building Process
    • Picking the team.
    • Preparing the team and the organization.
    • Brainstorming all questions.
    • Taking action and documenting results.
    • Review and follow up .  
    The Profit Building Process is a 5-step process for improving profitability and reducing costs.
  • The Profit Building Process
    • The size of the team
    • The need for diverse skills
    • The team purpose
    • The team goals
    The basic principles that guide the building of the Profit Building Team
  • Build a Profit Building Team
    • The size of the team
    • The need for diverse skills
    • The team purpose
    • The team goals
    The basic principles that guide the building of the Profit Building Team
  • Choosing and Managing the Profit Building Team
    • Team members must be committed to reducing costs within each line of the Profit and Loss statement.
    • Team members must set performance goals that will be easy to track and measure directly from future P& L statements.
    • Team members must hold themselves accountable for the reduction of cost and the profit improvement directly associated with the team action steps.
    The Profit building team is a group of no fewer than 5 and no more than 8 people who have been selected because of their ability to think “out of the box”.
  • Preparing Your Team and the Organization
    • Direct confrontation.
    • Audit the entire process.
    • Conduct regular surveys.
    • Listen to customers, suppliers and vendors.
    • Outside consultants, freelancers, hiring
    • Special communication improvements.
    • Training.
    • Process Review
    • Incentives and contests.
    The Organizational Complexity Predictor is a tool for measuring the level of resistance to change present within an organization.
  • Taking Action and Documenting Results
    • Ranking Profit building process questions
    • Formulating action steps
    • Assigning responsibility
    • Setting target dates
    • Measuring progress
    • Developing a contingency plan
    • Initiating review and follow-up
    • Choosing the next PBP question to address
    Taking action and documenting is the catalyst for profit building, leading to review and follow up.
  • Reviewing Progress and Following Up
    • Review each action step to determine whether the cost-saving idea or solution has merit.
    • Follow up on the person responsible for taking steps to complete the assignments.
    • Ignite the process after recording results, moving on to address the next question.
    • Learn from your mistakes.
    • Post successes in every corner, including amount of dollars saved.
    • Celebrate.
    Taking action and documenting is the catalyst for profit building, leading to review and follow up.
  • Some Cost-Saving / Profit Building Ideas
    • Rent out antenna space to cellular phone companies.
    • Sell your customer database!
    • Explore an Internet strategy to increase profit and reduce costs.
    • Review salary increase guidelines and administration programs.
    • Encourage employees to take direct deposits to reduce the cost of generating paychecks.
    • Develop an incentive to reduce absenteeism.
    • Offer higher salaries in lieu of benefits
    • Install a choose your own benefits program
    • Sell excess property or lease it out.
    • Purchase regular instead of premium gasoline.
    • Your ultimate last resort: Lay off some employees.
  • BusinessSummaries.com is a business book Summaries service. Every week, it sends out to subscribers a 9- to 12-page summary of a best-selling business book chosen from among the hundreds of books printed out in the United States every week. For more information, please go to http://www.bizsum.com. ABOUT BUSINESSSUMMARIES