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ELIMINATING COST CENTERS

WOULD THE ROOF CAVE IN IF WE STOPPED DOING THIS WORK ALTOGETHER?

No matter how well a business prevents cost inflation, it will still have to cut costs. This is because businesses are like people, and people often get sick no matter how carefully they exercise, control their diet, and avoid substance abuse. There is thus always the need for cost cutting. To start cost cutting, management usually asks: “How can we make this operation more efficient?” it is the wrong question. The question should be: “Would the roof cave in if e stopped doing this work altogether?” And if the answer is “probably not,” one eliminates the operation. It is always amazing how many of the things we do will never be missed. But businesses that actually succeed in cutting cists don’t wait until they have to cut costs. They build cost-cutting into normal operations. They build into their routine operations organized abandonment. Otherwise, eliminating activities and operations runs into extreme political resistance.

ACTION POINT: Set up a systematic process of reviewing all products, processes, and services. Abandon those that no longer contribute to customer value.

MAKING COST-CONTROL PERMANENT

COST CONTROL IS NOT A MATTER OF COST CUTTING BUT OF COST PREVENTION.

What matters is not really the method. It is the realization that the cost-effectiveness of an activity depends on the way it is being structured. It depends heavily on accepting the premise that cost control is nor a matter of cost cutting but of cost prevention. And costs never drift down, so cost prevention is a never-ending task. No matter how well structured the organization, its cost-effectiveness needs to be looked at again and again. No matter how carefully it controls its costs, its activities and processes need to be put on trial for their lives every few years.

This process also ensures that the entire workforce embraces and accepts cost control. It should actually see it as an opportunity and not a threat. If cost control is seen as cost cutting, the workforce will see it as an opportunity and not a threat. if cost control is seen as cost cutting, the workforce will see it as a job threat and will refuse to support it. But if cost control is seen and practiced as cost prevention, then the workforce will actually see it as an opportunity, or at the very least it will support the cost control for the sake of better and more secure jobs.

ACTION POINT: Put all the activities in you organization on trial every two or three years.

It was the Law of the Sea, they said. Civilization ends at the waterline. Beyond that, we all enter the food chain, and not always right at the top.

HUNTER S. THOMPSON

During the Enron debacle, it was workers who took the pounding, not bankers. Not only did Enron employees lose their jobs, many lost their retirement savings. That’s because they were at the bottom of the investing food chain.

ROBERT KIYOSAKI

In corn, I think I’ve found the key to the American food chain. If you look at a fast-food meal, a McDonald’s meal, virtually all the carbon in it – and what we eat is mostly carbon – comes from corn.

MICHAEL POLLAN

With so much evidence of depleting natural resources, toxic waste, climate change, irreparable harm to our food chain and rapidly increasing instances of natural disasters, why do we keep perpetuating the problem? Why do we continue marching at the same alarming beat?

YEHUDA BERG

The most interesting biofuel efforts avoid using land that’s expensive and has high opportunity costs. They do this by getting onto other types of land, or taking advantage of byproducts that aren’t used in the food chain today, or by intercropping.

BILL GATES

In every other science fiction series, humans are at the top of the food chain. In the ‘Babylon 5’ universe, they’re in the bottom third.

J. MICHAEL STRACZYNSKI

If you’re overfishing at the top of the food chain, and acidifying the ocean at the bottom, you’re creating a squeeze that could conceivably collapse the whole system.

CARL SAFINA

I take my part in the food chain very seriously.

DOMINIQUE SWAIN

What I’ve been developing is a vegan fast food chain and vegan food markets.

HEATHER MILLS

Rarely do I do film press because I’m so low on the food chain of the movie, and for me it’s just this thing I did for four weeks before the next tour started.

HENRY ROLLINS

It’s all about who’s where on the food chain. When I’m the story editor, I expect my writers to follow my vision. When I’m working for another editor, I’m obliged to follow their vision.

LEN WEIN

Australia is the only island continent on the planet, which means that changes caused by planet-warming pollution – warmer seas, which can drive stronger storms, and more acidic oceans, which wreak havoc on the food chain – are even more deadly here.

JEFF GOODELL

I think that there are a lot of law enforcement officers out there who work according to their own set of what is right and what is wrong. And that doesn’t always include respect for administration cops, you know, people that are higher up the food chain.

BRUCE WILLIS

Food safety involves everybody in the food chain.

MIKE JOHANNS

First I would probably place men at the bottom of the food chain. On a grander scale, I would say they’re reacting to change. Feminism has got to be part of that.

NEIL LABUTE

Supermarkets don’t really sustain a community, and they completely remove people from the food chain.

ARTHUR POTTS DAWSON

Jessica Alba to me is on the top of the food chain. She’s gorgeous, she’s smart, and she really takes care of herself. I think that she looks great. I think that as Jennifer Aniston gets older, she looks better and better, and I really like that.

BOB HARPER

Every fish fertilizes the water in a way that generates the plankton that ultimately leads back into the food chain, but also yields oxygen, grabs carbon – it’s a part of what makes the ocean function and what makes the planet function.

SYLVIA EARLE

If newspapers were a baseball team, they would be the Mets – without the hope for those folks at the very pinnacle of the financial food chain – who average nearly $24 million a year in income – ‘next year.’

ERIC ALTERMAN

I heard about the project over a year before we began. My American agent said, ‘Oh, you might want to read ‘In Cold Blood’ because they’re talking about you for Capote, but the script’s with Johnny Depp and Sean Penn at the moment.’ So, these things take their time to dribble down the food chain.

TOBY JONES

When you’re a dancer who is injured, you are at the bottom of the food chain. We are so replaceable.

BEBE NEUWIRTH

Even the other kids who people made fun of made fun of me. That’s where I stood on the school food chain.

NONITO DONAIRE

With our lives and food chain set up to make us fat – I mean, you can’t drive down any highway in America and find a grapefruit – a guy needs to be smarter and more determined to get lean.

DAVID ZINCZENKO

I mean, on the food chain, do instruments really rate? I don’t think so.

PEABO BRYSON

In Britain, the big supermarkets dominate our food chain. British supermarkets are some of the best in the world at controlling, manipulating and delivering cheap food.

ARTHUR POTTS DAWSON

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