Ed’s “No Excuses” Program: Had it really worked for thirty years or thirty years ago?

Please refer back to my previous post about the clown who had been elected chairman of board of one of my previous employers. Remembering those events really got my cynical dander up!

You’d have thought it was the second coming of Christ. The “chairman” (I’ll call him Ed) was going to save our company from ruination. This time, though, our salvation would not come from a simple “programme du jour” but from a “culture change.” UH OH!

All managers and line supervisors received a memo from the president. All “white collar” employees were expected to attend meetings over the next week with both he and Ed. The purpose was to become indoctrinated and trained in the concept of “cost reduction.” The concept was touted as a new way of thinking – a new way of life – a new culture. Attendance was mandatory and NO excuses would be tolerated! Attached to the memo was a form that had various columns including date, project number, description, annual savings, etc. You probably know the drill.

The first order of business was determining exactly who was a “white collar” employee. We were not formally structured like a large corporation. There were some staff people and clerical types who straddled both the plant and the office. We were very “lean” due to constant “rightsizing.” Since I had no idea who Ed might consider to be “white collar,” I made the mistake of asking my boss (who had actually written the memo at the behest of the president and as dictated by Ed) about the intended attendees. “Ed wants all white collar employees to attend,” he shrugged. I sensed that he was really irritated about the whole thing. My boss had this way of becoming slightly sarcastic when he was upset with something going on “upstairs.” He soon recovered and put on his “I am a true believer in the cost reduction culture” face. He was a senior executive and I knew that no matter how goofy this was going to be, he would embrace and support it. We made up the list. Had we only included management, the group would have been too small. We decided to include the clerical and even semi-clerical types in order to fill up the room.

I will abridge the minutes of the meeting for the sake of brevity. It only lasted an hour. I may be exaggerating a little, but by and large, this is how it went. Just close yours eyes and imagine:

Speech from president with slide show:

“Everyone meet Ed. Ed was president of blah, blah, blah, etc. Ed has extensive experience with cost reduction programs. He has been saving companies millions over the past thirty years. We need to save $10 million this year. Since its April, we’ll cut it back to $7 million for this year but it will be $10 million again for next year. You already have the forms. You will each get a goal. There will be NO excuses. I want your forms back with your projects and your savings by next week. Anyone who does not come up with enough projects to meet their savings goals will have the shortfalls added to next year’s goals. Anyone who gets behind in coming up with projects and implementing them will have private meetings with Ed and me. You don’t want that! There will be NO excuses. Questions?”

Silence.

Speech from Ed:

Hi, I’m Ed. Your president and I were at the board meeting last month and we were challenged to come with a way to get this company more profitable. We were each given a piece of paper and asked to write down how much savings were needed in order to make this company profitable again. We both left the room and went off into two different areas. When we came back, we compared notes. Would you believe it? We had each written down exactly the same amount, $10 million! Now I’ll bet you’re all wondering how we’re going to do it. Don’t worry! I’ve been doing this for thirty years. Cost reductions! That’s the ticket! It’s a culture, a way of thinking. It’s really simple and I will help you do it. I’ve implemented this at every company that I’ve worked with and it works! You are the people that will make it happen. You are management. You will control your own destiny. Make no mistake about one thing, there will be NO excuses. I will guide you every step of the way. The best part of the program is the personal recognition you’ll get when you exceed your savings goals. Oh yeah, I forgot. You’d better come with projects that total at least double your savings goals. That way, if some of them aren’t approved, you’ll have others to fall back on. Remember, there will be NO excuses.

Now to make things easy for you, I am going to give each of you my personal list of 1001 cost reduction ideas that I’ve gathered over the past thirty years. These ideas work! See how easy it will be? And if that’s not enough, I even have another list of 300 more. Believe me, the people loved this. Once they got going, there was no stopping them. But remember, there will be NO excuses! And you do not want to be called into one of those meetings with the president and me. Questions?”

Silence.

 Closing remarks by the president

“Uh, Bob (glancing over to the VP of finance), when will those cost reduction goals be sent out? I want everyone’s forms back by next week. We’ve got to get going. Remember, NO excuses!”

The sounds of moving chairs as the employees departed and the witty banter and back slapping between Ed, the president and members of the senior staff.

The stunned looks on the faces of the employees as they left the meeting were amazing. What a pathetic way to hold a meeting let alone usher in a culture change! Worse yet, we had invited many of the wrong employees. It was obvious from Ed’s speech that he thought that he was lecturing the management. Why hadn’t anyone asked him what he meant by “white collar?” I sensed that we were doomed.

The cost reduction goals came out a few days later. I asked my boss about when the training would begin. “You’ve got the forms,” he replied. That reply set the tone for the rest of our conversation:

“Well how does the process work?”

“You heard Ed.”

“How about some examples of how projects are developed and implemented?”

“Didn’t you get the list of Ed’s 1001 cost reduction ideas?”

“No.”

“Oh, I guess we forgot to hand them out. I’ll get you copies.”

“That’s not what I mean. It would be nice to see some examples of projects from start to finish. It might help the managers with the methodology.”

“Ed said that his old secretary used to keep volumes of project write ups.”

“Can we see some?”

“I don’t know.”

I gave my old boss a lot of credit for saying all of this with a straight face. We never got the examples I had asked for but I did get the list of the 1001 cost reduction ideas as well as the bonus list of the additional 300. Some list! The 1001 and 300 ideas were nothing more a compilation of statements, comments, fragmented sentences and even questions. It looked as though someone had simply emptied a suggestion box over many years and just typed up the contents. My recollection of the breakdown of the 1301 ideas:

50% – Items that we had already attacked, attacked and attacked to the point where our infrastructure was crumbling.

20% – Items having nothing to do with any of the processes or costs associated with our type of operation or even company structure. Ed’s old companies were in different kinds of businesses and had processes that we did not perform. There were no common threads either practically or conceptually. You can’t cancel a guard service that you do not have. These were dead ends.

20% – Items having to do with processes, technology and systems that  had been outdated or obsolete for at least twenty years. Mandate the use of Watts lines? Gimme a break! More dead ends.

5% – Items that were actually just posed as questions: “Are you a member of a paint reclamation team?” Huh? More dead ends.

4% – Items that actually contradicted each other: “It’s cheaper to send things out rather than do them inside.” vs. “It’s cheaper to do things inside rather than send things out.” More dead ends.

1% – Maybe a few real “ideas” that we might have overlooked over the years. On balance, though, these items wouldn’t amount to peanuts.

This review reinforced my view that both Ed and his program of NO excuses culture change might have worked once years ago. Perhaps with the right company at some precise moment in time when the stars and planets had aligned just right. Even if that had indeed happened, that time had long passed. Talk about resting on one’s former laurels! This was pathetic.

Well, we finally got something going. As middle managers, we were stuck with rolling this out and we did. Of course, it was much more fluff and form than substance. There is such a thing called “the law of diminishing returns”. Our cost reduction efforts prior to Ed’s arrival had already squeezed the life out of the place. Over the next two years, the program and NO excuses culture began a slow but agonizing death spiral. Almost the entire senior staff, other than Ed, the president and Roy (remember him from a previous post?) bailed. I did too.

I make NO excuses for leaving. I just pity the poor employees who couldn’t.

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