9 Steps to a Better Bottom Line

profit

How to Improve Your Bottom Line

In the last several years, businesses have faced smarter competitors, continual change, technological innovations, and uncertainty.

It seems more difficult than ever to both grow the top line of a business and the bottom line, too.

That’s the challenge that Dr. Dorriah Rogers, CEO of Paradyne Consulting Works, takes on.

From her work with some of the most complex projects and organizations, Dorriah has developed a 9 step program to grow net profit. After reading her new book Decide to Profit: 9 Steps to a Better Bottom Line, I asked her to share more about her research and experience.

 

“The man who removes a mountain begins by carrying away small stones.” –Chinese Proverb

 

Tell us more about the 9 steps and how you arrived at them.

The 9 steps are the result of many years of implementing various profit-focused solutions and systems across many different types of industries and companies.  At one point in my consulting career, a senior executive (almost, but not quite) jokingly asked me if I could develop an “Operations Manual” of all the tools I had at my disposal.  That was the genesis of the 9 Steps.  From there, I kept refining the steps, making sure they were interrelated, and asked for real-world feedback from my clients, until I had it down to a system as simple as I could make it.  I wanted to create a process that was not overly complicated to understand or use, and I wanted to create something that both managers making decisions and employees wanting to make an impact could readily implement to help their companies improve profitability.

 

“Whenever man comes up with a better mousetrap, nature immediately comes up with a better mouse.” –James Carswell

 

Identifying the system that needs improvement seems straightforward, but it isn’t as easy as it sounds. What if you can’t seem to identify which one is off course?

Agreed.  It is not simple to get started.  And that is why so many of my clients struggled.  They either focused on too many improvements or the wrong ones.  In many cases, most managers and employees inherently know where they need to start, or in what general area, and that is as good a point to begin with as any.  It may not be as tight a starting point as you might want, but the 9 Steps will help to define and clarify if it is the right place to focus your attention and resources as you progress.  Keep in mind that a “system improvement” could be as big as an entire corporate overhaul (like the Lego case study in the book) or as small as an internal vendor payment process.  The idea is to find those things that are impacting your ability to make money.  So the first place to start is to discuss internally which things are impacting your ability to generate profit.  Not revenue, but profit. 

Companies have a choice: keep doing what you’re doing and make incremental (or no) improvements to your bottom line, or tackle your best estimate of the system within your organization that could potentially have the biggest impact on profit.  You might start out with the wrong one, but the beauty of the 9 Steps is the iterative process built into it.  Along the way (and fairly soon) you will realize that the system you chose to improve might not be the right one because it is NOT positively impacting your financial goals, and the steps will prove that out for you through the ROI process.  At that point, you simply readjust, and the 9 Steps will guide you closer to those areas that will have the biggest impact.  So in short, start somewhere and the 9 Steps process will get you where you need to be.

 

“Creativity is thinking up new things. Innovation is doing new things.” –Theodore Levitt

 

Beware the Expert Loop

What is the expert loop and how does it often cause problems?

The expert loop was first coined by Alex “Sandy” Pentland in his November 2013 HBR article entitled “Beyond the Echo Chamber.”  In it, he posited that within organizations only a handful or individuals are viewed as the experts and the only ones who are capable of making important decisions.  I agree with his conclusions that, in fact, seeking information outside of this expert network is often much more valuable.  Time and time again I have seen the phenomenon of top executives sitting in rooms with the same small group of people as they rehash both problems and ideas in a tired, circular rhythm. The same ideas are beaten to death, and the same people are heard.  Even when new people are brought into the conversation, their ideas are often dismissed or even scoffed at as the experts re-establish their positions of authority at the top of the food chain. The problem this creates is twofold: a lack of true innovation and the stifling of a culture of continuous improvement.  While it is true that experts should (and do) have great ideas, it often requires a fresh perspective or a dissenting voice to shake things up and move the company in a new direction.  Some of the best ideas I have ever heard have come from the most unexpected voices.

 

9 Steps to Improving Your Bottom Line

  1. Identify the system that needs improvement.
  2. Put the right team together.
  3. Identify the goal.
  4. Observe the system.
  5. Identify bottlenecks within the system.
  6. Brainstorm.
  7. Select optimal solutions for improvement.
  8. Implement one change at a time.
  9. Sustain a culture of continuous improvement.

 

Unlock the Power of Brainstorming

Detect and Root Out Behavior That Undermines Your Workplace

Simple Sabotage

The year was 1944. The Office of Strategic Services (OSS), the organization preceding the CIA, published a classified document, The Simple Sabotage Field Manual. The manual was designed to destroy the Axis powers from within. It contained numerous small acts that would wear down the enemy, but it also contained a list of techniques to sabotage organizations. Ironically, these very same techniques often still sabotage modern organizations. People are not intentionally sabotaging their organizations, but they may not even realize that they are engaged in these behaviors.

Authors Bob Frisch, Cary Greene, and Robert M. Galford review the declassified manual. In Simple Sabotage: A Modern Field Manual for Detecting and Rooting Out Everyday Behaviors That Undermine Your Workplace, they show how the same insidious behaviors are damaging organizations today. How to recognize these damaging behaviors and what to do about them is the subject of this fascinating book.

Bob Frisch sheds light on these everyday behaviors that undermine today’s workplace.

 

“Successful organizations make and execute decisions faster than their competitors.”

 

How Good Behaviors Can Become Dangerous

It seems all of us may fall into one of these acts of sabotage at some point or another. How do you recognize these early enough to make a difference?

Good point. And remember, we’re not suggesting you have enemies lurking in your midst doggedly working to bring the organization down. Most of the time, individuals unwittingly employ these tactics – things like ‘doing everything through channels’ or ‘advocating caution.’ These are good behaviors taken to an extreme.

You might think, “This is easy. I’ll just point these things our to my colleagues and the behaviors will stop.” Unfortunately, it’s not that simple, since these corrosive behaviors often become part of the working culture – and spotting them isn’t easy.

The four steps we talk about in the book to both expose and inoculate any group against sabotage are:

  1. Identify.

Spot sabotage as it occurs. Help others see when a positive behavior crosses the line and becomes counterproductive or destructive.

  1. Calibrate

Put into place the right expectation for tolerance – the range of acceptable behaviors – so that productive behavior is encouraged, but sabotage is prevented.

  1. Remediate.

Give everyone in the organization the permission, language and techniques to call out damaging behaviors in constructive ways.

  1. Inoculate.

Introduce tools, metrics and process changes to prevent sabotage from recurring and to help develop a low-sabotage culture.

Sometimes these are sequential, but more often they have to happen at the same time – it depends on the type of sabotage, who spots it and the group you’re dealing with.

 

“Meetings are indispensable when you don’t want to do anything.” –John Kenneth Galbraith

 

Sabotage by Committee

Which one is the most prevalent?

Simple Sabotage_Cover-minIn my experience, the most prevalent form of sabotage is sabotage by committee. Too often leaders avoid making difficult decisions by referring them to committees, which creates a delay in the decision making process. As employees wait for decisions, they may get discouraged and dispirited. Some decisions require the use of a committee, particularly when multiple perspectives and areas of expertise are required. However, referring important decisions to committees creates the significant risk of halting momentum and can give the illusion of kicking the can down the road.

Is frequency or the most prevalent type different by kind of organization? For instance, do you see one more often in a for-profit corporation versus an academic institution or government?

Let me put it this way. When it comes to the prevalence of these sabotage tactics, organizations of various shapes, sizes and types are generally created equal. Over the years we’ve shared the list of OSS tactics with hundreds of friends, colleagues and clients – almost every time, they’ve chuckled and said, “That describes my [department, company, group, board, school or church committee].” We’ve heard them all. And that’s why we wrote the book. In our decades of working with individuals and groups in organizations large, small, public, private and non-profit, we’ve seen these corrosive tactics at work and witnessed the damage they can do in these settings.

 

“Committees can be deadly when they have the appearance that work is taking place when in fact very little is happening.”

 

Sabotage by Obedience