Around 1990, we suffered a general downturn in sales and established we had 30 surplus employees. Normally we would make the 30 redundant. In my career I had made 100s redundant. I was good at it. Jim Robinson was good at it. So were my teams. However on this occasion, I said, lets draw back. If we part company with 30 trained employees in 6 months or a year’s we will need to replace them. We also say we are knee-deep in waste. We also say we don’t have enough resources to tackle these areas of waste. Well, here we have 30 x 38 hours = 1140 hours per week of resource. Let us put them on that. Cost reduction. Why can’t we save two to three times their wage/salary costs? We agreed to do this.
The 30 we selected were not the 30 we would have made redundant. We picked 30 whom we thought would be good at this. I made it 100% clear; they were not the 30 we would have nominated for redundancy. There was unease, but we got them settled and focused. My management team and I brainstormed 100 ideas where we could save costs. This took less than 20 minutes. We didn’t evaluate any at this stage. If you do, it stems the flow of more ideas, including some ‘gems’, following on. I had to discipline those mangers who ‘like to get real’ and close down quickly to not do so. Areas where we knew we had waste, or where we suspected we could perform so much better. We then spent time discussing and ranking each idea, whittling them down to the Top Ten. Examples that come to mind were: energy cost/wastage: tool cost/short life, scrap disposal and the tonnage/price we obtained, general consumables waste, etc.
I personally led three days of training (really coaching) the team of 30, shifting them from the sever discomfort of this alien environment, giving them belief and the tools, to see such a cost-saving challenge was possible and what’s more, THEY could do it. And enjoy it. The were divided into teams of 3 or 4 and elected a leader for each. They selected one of the Top Ten and off they went. Importantly, each Team was allocated a “Champion”. Each Champion was a senior manager of director. Their role was to guide, support and give them teeth. The danger was, fellow managers, supervisors, colleagues would resist giving the Cost Down teams the necessary time and information. “We don’t have enough time,” etc etc. The Champion was there to unblock any resistance.
The team members more than saved their own wag/salary costs, by a factor of at least two, and formed powerful working relations across the business, which were to last for years. In the event, the downturn lasted less than 20 weeks and all returned to their normal roles. Quite a few became Team-leaders in the following months/years.