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Third rule; be as open as you can. Now, I know this is difficult and when
times are tough there are, often, very good reasons why you don’t want
to dent confidence in the organisation by admitting it is facing a
problem. You have to juggle the external boundaries and the internal
boundaries.
The truth is; the truth is probably your friend. Right now everyone
knows times are tough and they expect belts to be tightened and the
pinch to be felt.
It’s OK to say; ‘We all know everyone is facing difficult times and we are
no exception. We have to start looking very closely at what we are
doing’.
If you need to save operational cash the best place to find it is in the
hands of the people doing the job.
If you can be really frank, you should be; ‘We need to save 30% of our
operating budget and I want to do it as fast and as clean as I can, where
do you think we should start’? Now, expect the smart-arse comments;
‘sack the boss’ and all the usual frustrations to be expressed. Encourage
people to get beyond that. Explain the boundaries and ask them for
their help. You’ll be surprised what they come up with.
Number four; find out what you are really doing. Examine everything
you do. Absolutely everything. Cost everything you do.
Once you've done that you’ll have a better idea where your costs really
are.
Fifth; don’t forget the supply chain. How close can you get to your
supplier? What I mean is; if a product costs £100 the temptation is to
ask for a five or ten percent discount and think the job is done. It’s not.
As an alternative ask the supplier what his margin is. Here’s the
reasoning; if the £100 product costs £85 and the rest is margin, say to
© Roy Lilley 54