How do we get rid of extra pounds and excess overhead?

Did the pounds come back on in December? In January, the (web) store is a lot quieter and shoppers are keeping their hands to themselves, but pilates, yoga and spin classes are sold out by bums with good intentions. We make every effort to go into the new year fit, free of mind and full of energy. Does this also apply to your business? Are there too many pounds on there, too? Are there too many people walking around keeping each other from work, are there too many meetings and do they take too long, is there no line in the organization and does little come out of the hands of some of the people?

Symptoms often seen in retailers suffering from excess fat and overhead:

  • A forest of deviations from the basic process, creating many exceptions and duplications. As a result, many off-system corrections are required in logistics, stores and administration. And that, in turn, leads to additional procedures, instructions and duplication of effort;
  • A growing management team and new departments with no clear purpose. Let’s just organize it around the existing department otherwise we won’t get it done. An example is putting online into a separate team because the existing organization does not have an affinity and priority for it. This creates additional costs and discussions;
  • Not daring to intervene in the organization and organize the company around the non-functioning manager by putting someone else next to them to get the work done. Often the laggard then still causes people to be kept from work;
  • Allowing well-intentioned employee initiatives that do not contribute to the company’s direction and choices. It is often difficult to say no and have a constructive discussion about how people and teams contribute maximally to the company’s direction.

Are these symptoms recognizable? Then your organization needs to go on a diet! A good downsizing operation brings sharpness back into the business and motivates the tacklers to achieve results for the customer faster and with greater satisfaction. We call this grease-eater with an expensive term Organization Value Analysis: the critical approach that screens what you do (too much and not well) as an organization, challenges who is too much, whether the way you work is still relevant and efficient, and does the check on everything to see if it contributes to the company’s direction.

Fat eating (Organization Value Analysis) is performed in a few steps:

Step 1: File the organization into clear chunks and map how many people are at work

Make it clear that the sense of urgency is high! Start by dividing the key processes within the organization. Break down the organization into logical chunks. These could be departments or key process steps within your organization. For each chunk, determine what activities need to be performed and how many people are involved. Make it clear who customer and supplier are and what is expected.

Step 2: Get into the nasty details and get the bottom line

Get the basic process and all the exceptions clear by diving into the details. Involve a limited number of people from the team in the analysis. Bring clarity in number of FTEs, required inputs, outputs, activities and responsibilities. Ask the team to start thinking about necessary improvements and make it clear what you expect. Make sure the organization’s vision and strategy is sharp in order to test activities against it. Also conduct various analyses to make the discussions fact-based. What is the evolution of, say, productivity or margin over the past few years? What is the ratio of direct to indirect hours? What have been important activities in your market and what are the effects on the numbers?

Step 3: Find the weight-loss potential and determine how to get the pounds off

During short workshops, ambitious and (just barely) achievable goals are set in terms of efficiency, service and growth. Why? To ensure that the team is forced to cut out redundancy. Do all the exceptions and steps make sense? Or could it be more efficient? Can it be done with a different frequency? What does it contribute and if we stop, who really suffers? Does it contribute to the goals for the coming year? Use validation sessions to check details and test solutions. Do not hesitate to question departments and functions.

Step 4: Create a diet plan, get started, don’t hesitate and don’t take too much time to accomplish it

Plot all solutions on the organization. Work out concrete chunks of improvement potential. Integrate them directly into the annual plan and budget. Don’t forget to sharply define objectives, make them measurable and assign them to managers. Name the inhibitors and say goodbye to these. Make sure motivated remainers get a big contribution in the weight-loss operation. Also make sure that from the released funds you make some good investments and expansions so that your growth goals are really realized as well.

This approach guarantees that mid-year you look back on a good start to the year fit, full of energy and free of ballast, and feel fewer irritations about pointless internal consultations, lifeless managers keeping each other off work, retrospective corrections that take too much time and unexpectedly low margins. Biting through the bitter apple for a while, but the result is a motivated team that takes pride in each other and accomplishes goals quickly and efficiently.