Cost-cutting has been a top priority for CEOs in recent years, so much so that easy growth opportunities—or the “low hanging fruit,”—have gone unnoticed. Chief executive officers are often far removed from the thousands of processes carried out every day across the complex organizations they lead, and many of these opportunities are visible only to employees deep within the company who are closest to the work.
Lew Platt, former CEO of Hewlett-Packard, understood this when he said, “If only HP knew what HP knows, we’d be three times more productive.” CEOs that have solved Platt’s lament have realized all that is required is a greater focus on five key capabilities: problem-solving skills, cross-unit collaboration, fast decision making, strong implementation skills and real accountability.
Problem-solving: We become so accustomed to the way things are done that we lose sight of the inherent problems. For example, owners of a frozen food warehouse asked a third-party distributor for suggestions on how to improve its packing and repacking process, which was based on a first-in/first-out process but resulted in a lot of waste. With just a short walkthrough, the distributor pointed out ways to eliminate much of the repacking while still meeting safety guidelines. In the end, the company saved $500,000.
Cross-unit collaboration: Most divisional leaders are laser-focused on their own groups. When the frozen food supplier brought together representatives from factories across every division, they discovered that one factory was buying pasta from an outside vendor when one of the company’s own factories could make that same pasta at a much lower price.
Fast decision making: Nothing kills idea generation faster than slow decision making. Low-hanging ideas, however, are inherently easy to approve. Ask division leaders to present proposals in a simple one-page format. Then create a fast-track approval process for great ideas.
Ability to implement quickly: Although low-hanging fruit is, by definition, easy to implement, many projects fall short because of a lack of follow-through. A project management solution with built-in analytics will help communication across the team to eliminate any bottlenecks and solve issues.
Real accountability: Most companies are committed intellectually to accountability, but do not implement consequences for failure. True accountability means consistently and publicly associating promotions, public recognition, bonuses and terminations with success or failure.
When CEOs incorporate these core capabilities into the company culture, the rewards can be great. For example, when the CEO of a food manufacturer asked 7,000 employees to develop 500 ideas, it brought in $40 million. Any CEO can achieve similar results by harvesting their low-hanging fruit.
Jeremy Eden and Terri Long are the co-authors of Low-Hanging Fruit: 77 Eye-Opening Ways to Improve Productivity and Profits. Eden and Long are Co-CEOs of Harvest Earnings.