Killing Waste with a single letter

Enterprise_Capacity_Formula

Waste in business is the activity that doesn’t create any value. You can’t sell it, it doesn’t shape or create an end-product, and it hasn’t been done correctly from the first time. While we all try to optimize our processes by eliminating waste, let’s not forget that organizational structures have some waste too. Here I’m talking about the associates that do not create value but still represent cost ($) for the company. What we can do about it?

There is a quote: “If you can’t measure it, you can’t manage it”, it’s a golden principle that can be applied almost for everything.  Measurement of processes is relatively easy thing, with people it’s a different story. For the sake of simplicity let’s call them “Waste Ninjas”: they will hide behind other people accomplishments, great talks on “why we can’t do it”, blame speeches on others, etc.

You can invest a lot of time to track them, though I will suggest you much more easier way. Use email below for a quick scan:
“Dear Colleagues,

In order to utilize individual talent and capabilities, we’re pleased to announce a new incentive program launching next month.
In-scope: customer relationship, manufacturing, logistics and support functions.
Band level: mid/senior managers and function leaders.

Next month the basic salary level will be revised and will represent 60% of the current gross salary. The incentive level and the payout frequency will be linked directly to KPIs and the value delivered (e.g. process cycle time reduction effect in $). Incentives in average will represent 200% from a monthly basic salary.

If during each 4 months an associate had “red” KPIs or zero delivered projects, then their gross salary will be reduced by 20%.

Please refer to the attached guidelines for more information on the new incentive process.

Kind regards,
CEO”

In such a way you will both identify those who work for a big basic salary only and those who don’t create value, but are good at creation of the impactful image of their work. Which way? They will be the first to write you their complaints about unfair approach and unrealistic expectations with following resignation letters.

For them your email – the end of winning lottery and time to start work hard.

If your company already has salaries linked to a monthly KPI – good for you. If you have an annual incentive scheme and the salesperson in your department is in comfort zone with his/her basic salary and constantly whine about how market conditions are bad, then it’s time for you to write the letter. Be sure to scan all functions, otherwise ninjas will stay.

Giving credit to mercanix.com, we have mindset chemistry on gut vs data approach.

Kind regards,
Sergey

 

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