The end of a year like no other is fast approaching. Many of us have begun making New Years resolutions. The most common resolution Americans make is to get rid of fat.
In this spirit, an extremely successful entrepreneur we work with invited us in to help him with his New Years resolution of eliminating the fat in his company.
Our goal was to go through his organization department by department and identify fat.
We started by establishing several ground rules
1. To be effective we needed to put ego’s aside.
2. We would work side by side with the CFO to provide us with accurate information and assist us in our evaluations.
3. We established hard criteria to determine what the ROI we need from each person and satellite office.
4. We turned off the cell phones and emails, and made it clear we were not to be disturbed for the day.
5. The final rule was that there would be no sacred cows.
Within 5 hours it was clear that we could eliminate one office and at least one to two people from every department. We eliminated people because:
their positions were redundant
their position could be consolidated
an unnecessary job was created to keep someone and there was no real return from the position
an office was eliminated because the work coul done more effectively from headquarters.
There were people who were just not pulling their weight and we could pass on their work load to others who we believed were excellent players who were under utilized
By closing the office and consolidating it we were able to calculate immediate saving in rent, utilities, labor, benefits, cell phones, equipment rentals, and travel just for starters
Within 5 hours we identified fat in the high five figure range. We then played devils advocate to determine if we were realistic and what other consequences would we face by making theses moves.
In the end we determined they were the right moves to make. Not everything could happen at once, but a plan was put in motion that will eliminate all of these “empty calories” by the end of the second quarter of 09.
We concluded that regardless of the economy, we had identified and needed to eliminate unnecessary waste, redundancy, low performers, and cost creep.
Afterwards the CEO told us it was his job to be close to the money and keep his company healthy and sustainable and wished us a Happy New Year.
