In the corporate world, efficiency is a hot topic. Organizations are always striving to produce the most value for the least amount of effort. They attempt to embed it in their business models, strategy, and day-to-day operations. Unfortunately, they do not always succeed.
The major reason for this is that organizations don’t instill routine in conjunction with their efficiency efforts. This is the difference between wanting and doing. Let’s look at two examples of winning routines and then use them to extract the value and practices.
Dell Computer, in the late 90’s and early 2000’s, was in the midst of a huge pricing war in the computer industry. They and their competitors were slashing prices in an attempt to grab chunks of market share. Dell seized the moment by generating huge efficiencies in the sales and manufacturing portion of their business. They were the first to offer internet sales and to allow the customer to customize the computer’s configuration to their needs. They established manufacturing plants that, through processes and tools, were able to custom make individual computers on a mass scale for below benchmarked standards cost structure. Because of these efficiencies they drove many of their competitors out of business or to auctions for sale.
Our next example is an individual. Most individuals have routines not because they are interested in efficiencies, but because they are familiar and comforting to them. Those that are interested in efficiencies are usually athletes, soldiers, or extremely high performers in business. Wade Boggs played major league baseball for 18 years. He played in 12 All-Star games, won a World Series championship, and was awarded numerous golden glove fielding and silver star hitting awards. His highest honor was being selected to the Baseball Hall of Fame. One does not maintain that level of performance over that many years without being efficient and having routine. Each night before a game Wade would visualize four at-bats and imagine successfully getting four hits. He woke up at the same time every day, fielded exactly 100 ground balls, took batting practice at 5:17, and ran sprints at 7:17. He drew the Hebrew word “Chai”, meaning “life”, in the batter’s box before each at-bat and his route to and from his position in the field was exactly the same each time.
So, what are the practices of winning routines? Here we go:
- The first thing you need to understand is that routines need competition. You have to be able to keep score to know if your organization is winning or losing. Your opponent or industry benchmark standards may be your competitors. The score is kept based on performance in key areas and it can always tell you if you are winning or losing.
- Routines must start at the top, be part of your organization’s strategy, and work their way down through the organization. Every process, tool, and employee needs to be directly tied to the organizations game plan for winning.
- You have to be intentional about the way you play the game. You organization has to be able to describe what it does and how it does it. Processes have to be documented and habitually followed, discarding impurities along the way. Employees and their wages need to be continuously evaluated and reacted to. Low performers have to go away and wages need to be established based on performance. Greater production at lower cost has to be the focus.
- You have to be dedicated to your routine even when you are losing big time. Your organization has to be able to sustain its commitment through delayed gratification, knowing one day it will reap the rewards. There can be no quitting when things get hard or don’t look so good.
Efficiency is a must for survival. You may not be concerned with it personally but your executive management and competitors are. If you don’t pay attention to efficiency they may come knocking on your door bearing bad news. Keep executive management and competitors at arm’s length by instilling routine in your organization and you may find yourself knocking on their door first.