People Focus Spring 04 NA - CIPD

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Featureprofit build by developing profit-building teamswhose sole purpose is to uncover innovativesolutions and ideas for reducing costs byworking through every line of the company’sprofit-and-loss statement. Companies withprofit-building teams are armed and conditionedfor sustainable profitability.Developing teams specifically for profitimprovement is uncommon. However, this teamcan become the instrument for voicing opinions,gathering information and exploring newmethods for profit improvement.The Profit Building Process organises profitbuildingteams according to the followingcriteria:❚ Team Members: The team should represent across-section of the departments and skillsthat make up the backbone of theorganisation.These usually include operations,marketing, finance, information technology,human resources, telecommunications, andadministration. It is equally important tochoose team members who are creative "outof the box" thinkers. Involving innovativethinkers from a range of departmentsbroadens the team’s thinking and enhancesits ability to come up with creative solutions.❚ Size of the Team: Ideally, there should bebetween five to eight team members. A teamwith less than five members tends to take anarrow view because it does not include abroad enough base of skills and experiences.A team with more than eight membersbecomes unwieldy and slow to react.❚ Performance Goals: The Profit Building Teamis goal-oriented and must set clear, concisegoals that can be measured using the profitand loss statement.❚ Accountability: Team members holdthemselves accountable for implementingand following up on cost reduction and profitimprovement strategies.❚Regular Meetings: The Profit Building Teamshould hold regular weekly meetings. Whenthe team meets every week, it is easier totrack the team’s progress and follow up onaction plans.Even the most talented team members need aplan. First the team must ask as many questionsas possible in order to achieve the best solutionfor profit improvement. I call this processQuestions Brainstorming: a simple techniquethat opens the door to creative thinking. Theteam’s goal is to come up with as manyquestions as possible, this allows freedom toexplore all possibilities without feeling there is a"right" answer. The process of generating a longlist of questions eventually leads to innovativesolutions. Following is an example of theQuestions Brainstorming process:“ The process ofgenerating a longlist of questionseventually leadsto innovativesolutions ”1. Advise the team that the goal is to come upwith a list of questions that will eventuallybecome action steps for cutting costs orimproving profits. These are called “profitimprovement questions”. Give each teammember a copy of the profit and lossstatement to use as a reference and a guideto asking appropriate questions.2. Begin the process of asking questions suchas "How successful was the last marketingcampaign? How much was spent onmarketing last year?" You may want to focuson one area at a time, such as marketing oradministration.3. List each question on a flip chart or whiteboard. Do not censure or omit any questions.Encourage the team to spontaneously throwout ideas – the wilder, the better. The mostunusual questions may eventually generatethe most creative action plan.4. Once a sufficient list has been generated, theteam analyses the questions and prioritisesthem. Team members are assigned theresponsibility of researching top questions,and a performance improvement plan isdeveloped. Team members report theirprogress over subsequent meetings and thesuccess of the plan is tracked and measured.The end result is an action plan based on theanswers to the profit improvement questions.In the past five years tremendous strides havebeen made in the area of global economics,giving birth to the rise of the much clichéd, CelticTiger. Yet during this same period, job lossesand layoffs have set a record pace around theworld. Irish HR executives, particularly those inmultinationals, are well placed for setting theexample and demonstrating how HRprofessionals globally can be the catalyst forchanging business strategies where companiesprofit-build first and downsize last.Perry Ludy has over 25 years in P&Lmanagement and is a former senior executivewith PepsiCo and Procter & Gamble. He is thefounder and president of LudyCo Internationaland his book is called Profit Building: CuttingCosts Without Cutting People. For moreinformation, please visit his website atwww.ludyco.com or contact him by email atperry@ludyco.com.pg38 Autumn 2004
pg39 Autumn 2004
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