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Reduce Waste Using Hidden Employee Skills

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by Ward Chartier, Principal

During this time of economic uncertainty and the likely increase of tax and expense burden on businesses mandated by changes in law, executives are seeking even greater productivity from the workforce in order to maintain bottom-line profitability or even survival.  There is a generations-long history of companies achieving progressively greater productivity.  Nevertheless, business leaders are seeking new ways to continue this trend.

Many writers have described a wide variety of ways to squeeze the nth degree of output from individuals of all job descriptions.  A range of consultants will happily charge tidy sums for 1-day or 2-day workshops on the subject.  There is another way, one that costs very little, if anything, and enjoys a high payback.  The prerequisite is that an executive needs confident and effective managers and leaders to realize this productivity increase.

Many companies expect their workforce members to essentially leave their experience and abilities at the door when they arrive at work.  This attitude treats employees as commodity labor.  True, sometimes commodity labor serves a business better than a workforce composed of employees with multiple competencies, but I believe this is the exception rather than the norm.

The famous quality assurance philosopher Dr. Joseph Juran pointed out that about 25% of an enterprise’s resources generate waste, requiring rework.  He called this wasted activity the “hidden factory.”  If we accept the truth of Dr. Juran’s assertion, then we can safely assume that businesses have ample opportunities for productivity improvement coming from waste reduction and elimination.

Having led operations that delivered tens of millions of dollars in profit improvement for scores of waste reduction initiatives, I can safely say that a few small teams of trained productivity improvers will just begin to scratch the surface of what improvements are possible.  Yes, businesses need a cadre of employees trained in advanced techniques like 6-sigma programs to attack the complex, high-yield productivity improvement opportunities.  On the other hand, I have witnessed over and over that a motivated team or individual can complete 10 projects yielding $1 thousand each in annual savings faster than one project yielding $10 thousand in annual savings.  How do we attack the scores of potential productivity improvement projects with a handful of trained teams and yield significant results?  We cannot.

The proven and effective alternative is to tap the life experience of employees at all levels - janitors, gardeners, security guards, secretaries and clerks, accountants, manufacturing operators, fork truck drivers, etc.  All of these employees have managerial experience.

I have often conducted meetings in which I, as the general manager, would listen to the concerns and comments of individual contributors of all types.  These are called skip-level meetings.  I would ask the 12 to 15 employees assembled if any of them was a manager.  They would grin at each other and shake their heads.  I then asserted that they were, in fact, all managers.  I would always get very surprised looks.

Any employee who maintains a residence or has a family to look after is a manager.  Employees are accounting and finance managers because they manage their own money.  They are training and development managers because they raise their children.  They are HR managers because they handle the challenges of relations with a spouse or partner, and other family members.  They are facilities and maintenance managers because they maintain their homes, vehicles, and appliances.  They are project managers because they sometimes manage a move from one residence to another.  They are materials managers because they keep the cupboards and refrigerators full.  They are operations managers because they keep all of the small activities humming that are necessary to maintain their non-wage earning lives.

Employees at all levels have both depth and breadth of valuable experience, yet we executives and managers often ask employees to leave that capability at the door of the workplace.  They have developed simple and effective rules-of-thumb that efficiently use resources and allow them to complete tasks on time.  On a daily basis, such employees understand and practice minimizing waste.

For years I have advanced the idea that leaders and managers expect individual contributors to act like supervisors, supervisors to walk and talk like managers, managers to initiate like directors, and so on.  The next step is to expect that every employee, using the prowess gained from their life experience, to identify and eliminate waste.  Imagine the results if all employees are focused on raising productivity.  This approach pays off handsomely.

Little training is needed to lay the foundation for this approach.  If executives or managers  are condescending to their employees, regard individual contributors as stupid, micro-manage, or are excessively authoritarian, then the approach I advocate will not work.  Good leaders who can let go and guide other employees do their utmost are essential.

I advocate this approach as a general case.  We have all worked with a few employees whom we would not trust to walk and talk and chew gum at the same time.  Employees like these are definitely the exception.  We need to be especially wary of letting high-energy but low capability people loose to take unguided action, since their results will likely cause problems of all sorts.

To illustrate what is possible, I once conducted a skip-level meeting in Shanghai.  During the meeting, one employee who was close to retirement, Mr. Cao, commented that the bicycle and motorcycle parking area was a mess and needed improvement.  This employee was an ordinary warehouse clerk.  I asked him if he would be willing to lead the activity to make the parking area better according to whatever concept he had in mind.  I went on to say that I would commit a little money to the project and would let the other managers know that Mr. Cao was to have a free hand.  Was he interested?  Mr. Cao looked very surprised and accepted the opportunity.  In short, he did a fabulous job, exceeding what anybody had in mind.  Mr. Cao has since retired, but many employees remember that he was the one who completely led the activity to improve the parking area.  Imagine the possibilities if all retirees in our businesses left such legacies.

I hope the story of Mr. Cao inspires readers to try this approach.  With the right kind of leadership, it works very well.  

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