Common. Cost-saving projects are now common in most business organizations. In all probability, a number will be running in one form or another—within a typical business—at any point in time.
The reasons for these are evident. In a global marketplace where information flows freely across borders, pressures on corporate earnings are greater than ever before.
Once sheltered industries operating in near monopolistic situations are finding themselves more and more vulnerable to foreign competition, not only from within their region but also from far-flung locations.
The rise of China as a low-cost source for almost anything to anywhere has changed the configuration of many industries forever. Today when designing new products or looking at the cost of getting products to markets, China almost always has to figure in the equation. No business anywhere today can operate without consideration to what its competitors in various parts of the world are doing.
Hence cost-saving projects have become even more important components of any company’s commercial strategies.
Realizing that profits cannot just now be met by growing the top line, companies have increasingly looked to the middle to ensure a sustainably healthy bottom line.
To be fair, the Japanese had already realized this inevitability some time back, hence many of the processes and practices employed in this area today are borrowed from them.
As with all change management programs, not all cost saving projects are equally effective in their delivery of the desired results. Most probably never live up to the initial expectations. Clearly, this is not the most motivating outcome for both management and project implementers alike, and is only bound to cause even more stress and friction within an organization.
But what distinguishes a successful cost-saving project from the next failed one? Has anyone ever nailed down a failsafe formula that delivers every time? Is there a tried and tested Holy Grail out there that all businesses should latch on to and model all their efforts after?
Unfortunately not, is probably a more likely answer.
Systems like kaizen and 5S, borrowed from the Japanese, have produced fairly good results for those who have tried it. But lifted from a foreign culture and originally tailored for that culture’s business mentality, their implementation has sometimes been “lost in translation” and produced less than the ideal outcomes.
Having come through a lot of these projects of late in my own organization, my observation has been that although structured systems and processes, such as those of the Japanese, can and do work in many situations, there is still a very important element that in the end determines whether a project succeeds or falls down, and that is all to do with people.
As cliché as it may sound, people and their total involvement in any organizational commitment is still the good old difference between success and failure in any organizational undertaking. Japanese or German, Asian or American, any process of change will only be as successful if the people working for it are committed for success to happen.
More on this next week.
Published in Sun Star Daily, Saturday, May 20, 2006 (http://www.sunstar.com.ph/static/ceb/2006/05/20/bus/batuhan.lost.in.translation.html)