The plant leader of a manufacturing company conducts regular town hall meetings that are well attended. But, they didn’t use to connect the dots for the employees. Employees attended the meetings, liked what they heard but didn’t know how the information related to them. One told us, “He talks about our goals and plans but when I go back to my workplace I don’t know what to do differently to help achieve those goals.”
The plant leader asked us to connect the dots and we did.
The Discovery and Solution
The company’s primary financial goal is operating income (OI). We began by working with the finance department and the head of communication to create an operating income “statement” that described the components of OI and how each job (and in turn employee) can affect operating income. We then help the plant create and implement financial literacy meetings that taught people not only how they could affect OI but how they could use the information to make smarter decisions when they had trade-offs to make.
instance, sales people learned the importance of balancing the cost of travel to a prospect and the projected revenue that was likely from converting the prospect to a paying customer.
Employees in the warehouse learned the importance of balancing the size of inventory with the need to deliver products on-time.
People got into the business of the business and began acting like business people. In a few months OSHA recordables dropped from 13 in the baseline year to zero the next year. On-time delivery went from 67 percent to 92 percent. Total cycle time went from 26 to 17 and gross inventory turns went from 6.7 to 7.9. Productivity went up seven percent.