Increasing sales isn’t the only path to bigger profits. Often, working smarter gets you there faster. A former client recently reported that reorganizing one of his divisions had more than doubled its profitability. Here’s how we did it…
The Problem
One support division of a large services firm had been struggling to complete its 800 copying, scanning and data processing jobs each month. The division director was juggling responsibilities, reacting instead of planning ahead. Because there were limited standard procedures, it was impossible to analyze trends in order to isolate the root cause of specific delays. The typical reaction when deadlines loomed was to work weekends and hire outside help. Quality suffered and internal costs climbed.
The Fix
After interviewing division staff to understand their strengths, we delegated some of the director’s responsibilities to individuals with project management and other supervisory skills. For the first time, everyone—including the director– began working in accordance with written job descriptions that clearly defined personal accountability. Performance metrics, including a bonus structure, rewarded employees for achieving company goals, such as reducing paper expenses or rework.
At the same time, we developed guidelines for handling client requests. These included:
- Assigning responsibility for logging in new jobs and communicating with customers
- Developing job-specific production schedules, to be used as the basis for promised delivery dates
- Cross-training so that incoming jobs could be assigned to a project manager with fewer delays
- A workflow analysis, with tasks assigned to each “post.” A job sheet signed at each station established accountability, while in-and-out time stamping enabled us to continually refine scheduling.
The Result
The outside labor expense was reduced by 94 percent, leading to a doubling of profits. On-time delivery and accuracy exceeded 98 percent. The internal talent had always been there to get the job done. It was a matter of designing a system that released their potential.
Interesting case study; thank you! It’s a good reminder that processes need to be constantly evaluated for efficiency, and that has to start with job descriptions.
Job descriptions followed by metrics are a good place to start when establishing accountability. The age old question of “what does my boss want from me” is no long lingering and focus can be put towards being efficient.
Love the post and great information/lesson for all business leaders. Thanks for sharing!
By adding structure and accountability, the team began to understand what was expected of them. That talent that was present was now being leveraged.