Hi there, Matts Rehnstrom here, Shaper of Business Excellence. In this video, I’d like to talk to you about “Show me the money.”
As you see, I’m standing here in my studio. I’m recording a couple of training videos, and I explained that in an earlier video as well. Moreover, yeah, I’m still here. I’m still recording. So, soon I hope this new training will be out there for you.
Show Management the Money
In this video, I’d like to talk to you about “show me the money.” What do I mean by this phrase?
I see all too many improvement initiatives that the company will never implement. That is because someone sees that the cost is too high. I am using the word “cost” because management doesn’t always see the improvement work that you’ve done. Instead, people within the organization see the implementation of the improvement as a cost, not an investment.
Executives at the company will only compare the cost of the improvement work to the budget that they have for this year, this quarter or whatever and say; “oh, I haven’t budgeted for anything like this.” Management won’t see your improvement work as an investment unless you help them to see it that way.
Create a Culture in Your Organization that Sees Improvement as an Investment
The first step you need to take that will help the company to see improvement work as an investment is to create a different culture within your organization. Your business needs to have a culture that can see the positives in improvement work as investments, not costs.
The improvement work is an investment in your business to make it better:
- The company will be better
- The organization will be able to provide more value for your customers
- The morale everyone within the organization will improve
- Moreover, better value for customers and engaged employees will improve the financials
There are many ways that improvement work can improve a company’s bottom line.
You need to illustrate those improvements in a way that your organization will understand.
Develop a Gain Value Analysis
The second step you need to take to help your business to see the improvements as an investment is to do a Gain Value Analysis. When you develop a Gain Value Analysis and deliver that as part of your improvement model, the organization can see the improvements you want to make and an analysis of how those improvements will affect the organization.
You can show the Gain Value Analysis to them, and you can say; “Oh, here is what we gain from implementing all the suggestions that we have for improvements.”
Bonus tip: Show them the soft gains and the hard ones
When you are creating the Gain Value Analysis you need to outline the soft gains, as I call them, not only the hard ones.
Take the saving of paper, for example. You can say, “Yeah, we’re not sending paper invoices anymore, so we’re saved this much on the paper and the postage and so on.” That is a hard gain.
However, you have soft gains that you need to look into as well.
style=”font-weight: 400;”Soft gain can include:
- What is it worth for someone to feel better?
- Will, the employees and management be less stressed and more engaged?
- Will the customer going to get a better value?
You need to learn how to drill down to these gains and find the value of them and then show that to the managers. You need to show the money to them. Okay?
That’s all for this little video. I’m going back into the studio to continue recording material about gain value analysis and other things. Uh, so with that, good luck and, let’s go and shape our businesses for excellence.