The Systems Thinker Blog

The Dollars are in the Details!

Posted byRon Carroll

We are all familiar with the expression, "the devil is in the details." However, in business, it is also true that "the dollars are in the details." Your profit at the end of the year is highly dependent on how well you manage the important details within your company.

The Dollars are in the Details

A recent Toyota commercial said, "We care about the details behind the details." They mean it! For example, a Toyota project manager drove a Sienna Minivan through every state in the USA to learn about the American driver. Among other things, he realized that America is a large place, and families drive long distances. He saw a need to add many more drink holders to the Sienna's interior. With this kind of attention to detail, the Sienna "transportation system" is now a little better at serving its American customers (from Jeffrey Liker, The Toyota Way).

Every business owner must understand this important principle: Daily attention to small details can make a big difference over time.

Details Determine Destiny

We live in an age when the best companies grow and prosper because they do the little things well, all the time. Owners and managers realize that the success of their company depends upon the effectiveness of their internal systems and processes. And the success of their business processesmarketing, accounting, customer care, hiring, production, inventory management, order fulfillment, and so forth—depends upon the careful management of the seemingly trivial and boring details.

Remember, each customer contact is a moment of truth, a time when a relationship is either made or broken. Customers do business with companies that consistently meet their expectations—that deliver explicitly on their promise. Nothing can be left to chance. Most customers keep a subconscious scorecard on how well YOU handle the details! If frustrated, they shop elsewhere.

Keep in mind that daily improvements to business processes add incrementally to your profit margin. However, the accumulation of these often-subtle innovations can have a dramatic effect on earnings over the course of a year. The financial gains can be enough to rescue an ailing company, or help a good company flourish!

One of our retail customers put planted "mystery shoppers" through their ten checkout registers and was shocked to discover a 1.5% error-rate at checkout—a yearly cost of $150,000. They made a few minor adjustments to the checkout process, and the problems were largely resolved.

Another business owner modified workflow details in her order-fulfillment process and trimmed 10% from labor costs—a $75,000 a year improvement. You can get the same kind of results!

Details Make or Break Business Systems

Opportunities abound to refine the details of your organization, and depending on its size, there can be a lot of money at stake. In addition, the marketplace will not usually tolerate disorganized, seat-of-the-pants operations that are careless with details. If you are not a "detail person," find one who can help you out!

I know the world is filled with different personality types. And we love people of all kinds. However, when I have surgery, I want a detail person. When I build a new house, I want a detail person. When I get my car repaired. . . . Well, you get the idea. When it's important, we all want a detail person. And so do YOUR customers!

J. Willard Marriott said, "It's the little things that make the big things possible. Only close attention to the fine details of any operation makes the operation first class."

One last detail—you are losing money every day you wait, so START TODAY!

 

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Tags: Improvement, Innovation, Laws/Principles, Cost Cutting