Eliminate Waste and Reduce Costs

John Tschohl
Founder and president
Service Quality Institute
www.customer-service.com/

What would you say if I handed you a check for $25,000? $250,000?

Before you get too excited, I'm not going to do that. But I am going to tell you how you can find that kind of money and add it to your bottom line. No, it's not by terminating employees or by instituting pay cuts. If you want to cut costs, the most effective method—and one that will have long-term benefits—is eliminating waste, not people. How do you do that? Simple: Ask your employees.

There is waste in every organization. The challenge is to identify that waste and then eliminate it. Your employees are the experts. They see where the waste is—in time, procedures, and materials. Ask them to identify that waste and to suggest ways to eliminate it. You will build morale by making employees feel like you value their ideas—and you will improve your bottom line.

Many employee suggestion programs fail because executives are only interested in ideas that will save the company $100,000 to $1 million. They fail to identify the small savings that quickly add up to big money. My company offers a program called BAD—Buck a Day—that asks each employee to identify a way to save just $1 a day. With 250 working days in a year, a 100-employee business would achieve a respectable $25,000 in annual savings.

Here are some tips for instituting an employee suggestion program:

Keep it short. A short campaign keeps enthusiasm high. Our BAD program runs for just 30 days. 

Make it fun. Dry, dull campaigns get little attention, which means they get few results. Incorporate fun and humor, and employees become more involved.

Recognize employees. You don't have to offer monetary rewards or a trip to Las Vegas to get employees to participate. Recognition is a much stronger motivator than money. Recognize employees in a timely manner through public praise, including an article and photograph in the company magazine or a pizza party.

Involve everyone. The backbone of a successful employee suggestion program is to engage all employees—from frontline employees to executives.

Implement ideas quickly. Nothing kills a suggestion program faster than a long lag time in implementing employees' ideas. If you don't implement ideas quickly, employees will lose interest. 

An effective cost-reduction campaign is based on the assumption that employees have worthwhile ideas. And those ideas can mean the difference between your company's failure or survival. In today's dismal economy, you must look for ways to dramatically eliminate waste and reduce costs. Ask your employees to help. You'll be amazed at the results.