“The test of efficiency is the length of time it takes you to find out when you’re wrong.”
Nobody knows who first made that wry observation, but business owners observe the truth of it nearly every day. Still, efficiency is less about correcting mistakes and more about decreasing use of resources and maximizing return. Simply put: it is spending less and making more by running the business better.
Optimizing a company’s operations, whether it sells a product or a service, is as much a change in philosophy as it is a change in practice. Continuous improvements don’t begin on the shop floor or in the delivery truck; they begin in the corner office.
“If a company wants to optimize operations, it needs to have the motivation and energy to make the transition from a traditional style of management,” says Howard S. Gitlow, professor of management science at the University of Miami School of Business Administration and author of several books on the topic. “This requires changing the definition of work from doing your work to doing and improving your work. When this change is made, and people are allowed to change, it releases the power of motivation—the motivation of sheer joy in doing the job better.”
It may seem unusual for a business school professor to talk about joy, but Gitlow doesn’t use the word lightly. “In order to create an environment in which the new definition is workable,” he says, “you have to change the mission of the organization from optimizing profit to promoting joy in work. The way you provide joy in work is by giving people opportunities to improve.”
Gitlow, of course, is talking about making employees partners in change. Improvements in performance, individually and collectively, can motivate a company’s entire work force. And the profits—in fact, larger profits—will come.
How optimization occurs involves the application of best practices, many of which were developed by the Japanese industry. Ironically, Japan learned the principles behind them decades ago from an American business consultant named W. Edwards Deming, who was fixated on improving product quality and saw the answer in delivering statistically measurable results. Academics such as Gitlow, and a host of consultants and authors, are now teaching these methods to business students and corporate clients.
One, called Six Sigma, focuses on identifying and removing the causes of errors. Employees are trained in its methods and earn belt colors signifying growing expertise, much as in Japanese martial arts. Another, called Lean, searches for waste in materials, procedures, or people. A third popular methodology is 5S, which is about organizing the workplace in an orderly manner. There are others, and taken all together, they sound a bit like the old-fashioned definition for efficiency. Still, these methods are proven to save money through elimination of imperfection and waste—money that ultimately flows to the bottom line.
If it all sounds like it’s thinking only for big companies, you’re wrong. Paul Keller, a Six Sigma expert at qualityamerica.com, writes that these programs quickly pay for themselves. A great deal of information is available at little or no cost through the Internet, books, and training videos.
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