1.  Get rid of the energy sappers. You know who I mean. They are your company’s whingers and whiners. Their glasses are always half-empty. A meeting? They suck forth its soul. A new idea? They strangle it at birth.

Do you have any idea just how much these energy sappers are costing you in lost opportunities? As one CEO with whom I work once said: “Here, adequate performance deserves a decent severance package!”

2.  Find out what your customer doesn’t want to pay for. Another client of mine heads a successful engineering company. For this company, a source of pride was its lavish, four-colour plotter: expensively-produced plans all featured various services proposed by the company, highlighted in different colours.  Imagine their horror when a client reported that although it looked wonderful, this method of design was worse than useless – it caused problems. When they photocopied the plans for use in their own offices or out sites, nobody could discern where the services were because – as we know – colours do not photocopy well.

It is important to find out what your customers value but, if you are looking to cut costs, it is just as important to find out what they do not want.

3.  If the pegs are square, fit them into square holes. How can you be sure that you are making best use of your human capital?  How much do you know about your people and their interests?  One client of mine found that his receptionist was attending creative writing classes; she is now a key drivers of the company’s relationship marketing and social media programme.  In another company, one of the store workers turned out to be a Group Scout Leader in his spare time; he now leads the company’s installations team.

Even when someone has been in a job for some time, they are likely to have developed new knowledge and skills outside work. Just ask them: you may discover that you have a wonderful pool of fresh talent on your payroll.

4.   Set a cost-cutting challenge and make it visible. One textile company with which I work created a “waste wall”. During each shift, all the waste would be collected and stuck up there. Targets were set. As they walked to the canteen during the shift’s tea breaks, employees could see if they were within their target. The waste wall was eventually broken up into departments. This enabled people to see when and where problems were occurring. They could then take the necessary precautions to prevent further waste from accumulating.

5.  Walk your orders through your business.  Do you have any idea of the cycle time of an order through your business, from the moment that the order is raised to the time that the invoice is paid into your bank?  Take a small, randomised sample of orders. Then follow them through the business. Don’t let your managers tell you what happens. Instead, see it for yourself. Note the lengths of time for which the orders sit without any progress being made, and seek to redress this serious waste.

I know one security company MD who walked her orders through her business. She discovered that work was taking three or four days, when it should have taken one. She also found that levels of customer satisfaction had plummeted. Systems and processes had been put in place but had not added any value. Instead, they were sinking time and costing money. She has since taken steps to avoid these unnecessary costs in the future.

If you want to cut costs in your business, what else can – and should – you do?

Image credit: wonderferret.