If you are unorganized, you operate an expensive business. Disorganization is expensive. I have been able to trim off as much as 14% from the expense budget of an unhealthy and poorly run business model. Sloppy operations can eat up everything you work to produce. I have seen some of the most expensive bad habits literally destroy an otherwise good business model. The only people who do not believe this stuff are the leaders who run these kinds of organizations.
Inefficiencies eat up profit dollars as if they are hourly snacks. They chew on the profits like they are munchies. They nibble at the profits here, they nibble at the profits there. Sometimes the leader does not notice the munching going on until a small bag of little profits from a short term project is found on the shelf, empty. The little bag has been opened and someone ate the profits. This happens in inventory, labor, equipment, energy, insurance, tools, support tools, motivational programs, safety and marketing. Every one of these centers of duty run more expensive when the organization is inefficient. Each one can become more than a 2% increase in cost if the organizational habits really suck. I only mentioned ten areas that can go haywire and run 2% more than what they should typically cost. That kind of inefficiency can cost your organization 20% more in expenses than it should be typically running. Ten times two! I have seen it happen to a lot of nicely designed business models. You may own one.
Profitability comes from a tightly designed, tightly managed and carefully organized business model. If you hire people who are cheap, people who are friends, people who are not themselves very organized, you run the high risk of seeing your business model fall down on the job of organization. This would be your fault, not theirs. You picked unorganized people to help you organize your business. They are being who they are. They are not doing anything wrong. You just selected the wrong type of people to organize your business model. This is not rocket science.
If you do not understand how expensive disorganization can be, you can skip reading the rest of this post. You can wait for another day and read a post more friendly. If you cannot find the scissors on the desk you manage, you might be disorganized. If you cannot find the remote telephone that used to be sitting in the charger on your desk, you might be disorganized. If you continually go searching for a product to retrieve to sell to a customer who has requested to buy it and one shows in your computer as being in stock...but not located in its proper location...you have organization issues. Once in awhile, this type of stuff happens. All the time, you have a problem. What's more, this problem is costing you every cent of profit you generate to be able to manage the extra trails you walk to cover the ground of double work it generates. Your profits are feeding the monster.
I have been asked to offer my suggestions on what I would do if I was offered the manager of a business model. I have been asked that question a few times in my career with different outfits. Most of the time it is safe to answer that question with something related to working on improving the different levels of becoming better organized. Most organizations could use a little house cleaning. It is usually a safe bet to answer that question with an answer that addresses how I would improve the organizational aspects of the business models. For the most part, many owners would enjoy hearing how their business model will finally get some of its costly inefficiencies cleaned up a little bit.
We hire friends, acquaintances, children of strategic board members, nephews of important customers and cousins of previous managers. We do not necessarily hire talent nor integrity minded qualifiers. In fact, I have witnessed a business manager ask a particular strategic relative to hurry up and bring in a resume' so we can do an interview. How will this employee work out? Not. When a manager has to resort to begging for a resume to be produced by someone who is not yet hired, how will that employee work out on the other requests coming in the future? How will that new hire perform future requests of tasks when they have already landed the job by not producing what was originally requested as an interview requirement? Sometimes we do not see this stuff. Trust me, it matters. Your organization lives or dies by how well it is run. A sloppy organization can be 14% more expensive to operate than a crisp organized one. What's more, the sloppy one requires more work to complete. The sloppy one is more frustrating to live with. Some of you know exactly what I am talking about.
I have not even begun the discussion on the subject of lost sales. Lost revenues is an altogether different expense that cannot be measured by the poorly organized business model. Here is a prime example. When a retail model designs its check out clerks to answer the incoming business phone calls, while checking out 'in-line' customers...that model is slowly losing the patience game with the customers standing 'in line.' Period. No exceptions. Everyone of us can explain this atrocity out with the low budgets we must respect in these tough economic times...but the truth is, we have developed a system of low customer respect and low customer service. Period. End of seminar. You either 'get it' or 'you don't.'
The business you slowly lose will not come to your desk in big notes from the customers, telling you they have decided to go somewhere else. The first time a customer stops to wait for their clerk to handle a phone call while they are being checked out is something they will tolerate. The next time it happens, they will begin to wonder where your help is? I hear them say that exact same thing. The third time they have this happen, they may be 'in-line' and watch it happen to the customers ahead of them. This makes them more anxious to wait their turn to be put on hold when they get to the register. Now this pattern becomes an issue. This issue has a limit. Every customer carries with them a fuse of tolerance. When that tolerance fuse runs out, you are done. Serving them in the future will cease. They will choose to go somewhere else. They will not write a nice note to you describing where they have gone and why. You will be left standing there trying to figure out why your volume has slowly been dipping downward. You will blame the economy. Figure it out. Solve this problem. That is what leaders do. That is why you are in charge of your business model. You get to solve these types of challenges.
I have seen repeat inquiries from sloppily dressed, poorly approached individuals come to ask several times when the manager would be hiring more help. They come in to ask about any job openings, regularly. Some of these people believe persistence is the reason why they should be hired. They are trying to wear out the decision-maker before he decides who to hire. Many of them come in looking like they do not take very good care of themselves. Some have terrible taste in appropriate clothing. Some have terrible skills in hygiene maintenance. Some will try to use guilt and remind the leader that 'profiling' is not a good habit to possess. These are people looking for work yet expect the leader to believe they can flip a switch and become better organized, better appearing, more respectable and more useful once they are hired. Organized behavior is a habit, not a duty. The owners of organized habits practice being organized when they live their own lives daily. Organized people are already organized. They do not need to eventually turn on a switch to become better organized. They already are. Make sure that is what you are looking for when you plan to hire someone who is organized. Help your business help itself.
Do you and your staff constantly find yourselves looking for inventory your computer says you have in stock? Yet, nobody can find it. Do you find yourself returning a lot of overstocked items that you know you cannot sell? Do you find your employees spending a little time each day working on fixing inventory challenges? Do you have trouble locating customer special orders that are not placed in a proper staging area for will call? Do you have trouble locating the tools that you use to complete the packaging your warehouse performs? Do you find you are re-purchasing tools, equipment, tape measures, software, wireless headphones and scissors because the last ones got lost, misplaced or broken? If your business model is loaded with this kind of mentality, you are not efficiently designed. If you find certain security steps are forgotten, certain doors are not kept closed, some locked doors are left unlocked, some files are not in their place, some phones are not resting on their charging stands and some employees are never on time...you are managing a poorly organized business model. If it was a model that once was very organized, the respect to manage that design was not very high. A breakdown in leadership has occurred. Who do you think has that responsibility? Is there a mirror somewhere?
Organized efforts will help any softly operated business run profitably. High volumes will erode quickly when you are not well-organized. Profits will eventually disappear. Some organizations have this type of affliction and believe more volume will help them increase profits. Wrong. More volume will become more headaches with the increase in lost inventory numbers, lost tools, extra employee energy therms required to keep up with all of the double work built into the inefficiency errors of organizational disrespect. You will need a larger checkbook to cover the cost of these inefficiencies. It is unavoidable.
If you support this type of operation, get used to paying more to make it happen. Your expenses will continue to run out of control until you become better organized and improve the respect for the better designs you put in place. This has nothing to do with doing what you like to do. It has all to do with doing what you do not like to do. Get better organized. Then learn how to respect and manage the better designs of improved organization. I believe the second part of that suggestion is the most difficult one to do. Most can organize a slick operation. Very few can manage one.
I hate this stuff, too.
Until next time...
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