What is stopping you cutting out waste? – Four steps to overcoming the barriers to change
My passion for sustainability was born and nurtured out of an abhorrence of waste. Waste in every sense, but particularly the systems that perpetuate wasteful behaviour and practices. In a world where every resource, be it material, energy, human, or even goodwill is in increasingly short supply and comes at an ever-higher cost, our first priority must always be to act as efficiently as possible.
The waste hierarchy of Reduce, Reuse, Recycle, Recover doesn’t just apply to our bins, but to every aspect of our lives and particularly business. Even small changes can have such a large and lasting effect.
Waste is no longer just a pointless material cost but a drag on your competitiveness, your culture, and your prospects as a business.
Waste is no longer just a pointless material cost but a drag on your competitiveness, your culture, and your prospects as a business.
I was fortunate enough to start my career working for Tesco; I spent nine years working for one of the most efficient organisations in the country. In an industry where 2.5% net margin is the aspirational norm, waste was the enemy and the quickest route to becoming uncompetitive. Relentless efforts to create margin by driving down costs, finessing processes, and embracing new methods and technologies enabled an enviable business that was admired from every sector. In my latter years I worked in the then still pretty nascent procurement team. We operated as an in-house management consultancy, whose job it was to look at the purchases and practices of each department and to uncover ever increasing efficiencies and cost effectiveness.
Interestingly, because the business was already so amazingly efficient, the underlying barriers to reducing inefficiency and waste were laid bare and indeed I have since found these to be almost universal.
The barriers to reducing inefficiency and waste
The excuse for not making changes is usually capital investment. This is often a valid complaint, of course it is, but there are also some key systemic problems that I have seen across businesses that also hamper better business practices:
Opportunity identification
You first must spot wasteful practices and efficiency opportunities, so you can act on them. There are countless ideas that are missed because the business does not engender a culture of encouragement, indeed reward, for people, mostly those on the front line/shop floor/coal face, who spot these golden ideas.
Risk aversion
It takes a brave person to suggest changing the way things can be done. It can also bring them into difficult conversations with colleagues, who may feel challenged or whose day job may change as a result. And if the idea doesn’t work, the instigator will carry the can. It takes a selfless manager to promote an idea and protect the individual who first offers it but also gives them the credit.
The grind of change
Almost all corporate structures make it very hard to change deeply ingrained processes. To enact any change usually takes the bravery of several people up the command chain and can be halted by the short sightedness of one. If innovation does come from some of the most junior team members, this must be encouraged and nurtured. However, all too often a convoluted, risk averse sign-off/budget approval process deters all but the most resilient of innovators.
Territoriality
Many good ideas involve cross functional working/cooperation, indeed budget reassignment. Different departments often have different ways of doing things and sometimes can be so siloed that they may stand in the path of a new project, even one with potential benefit to the business as a whole, if they can’t see the benefit to them individually.
Budget protection
Most large businesses are target driven businesses; it is the most tried and tested model, but it encourages entrenchment and protectionist behaviour. Any innovation that reduces the cost of an operation will be immediately ‘punished’ with a corresponding budget cut from central finance. As a procurement manager, I was often faced with scepticism, verging on hostility, at the suggestion of a recognised saving as this would result in a reduction of the departmental budget and so their ‘wiggle room’. Even worse, the size of a department’s budget can be deemed directly correlated to its and its team members’ stature in the business.
These barriers to progress not only prevent businesses from realising the benefits of greater efficiency, but they also damage morale, undermine employees’ sense of agency and meaning, and beget a sense of powerlessness – all toxic in today’s challenging business environment.
Four steps to cut waste and increase efficiency
So, what is the answer – how do we ensure that opportunities are identified, raised, trialled, and embedded? Having worked with dozens of businesses particularly on change projects and encouraging more sustainable behaviour I have seen some common steps that have dramatically accelerated action.
Strategy
The first step is to engage, build a strategy, and communicate it. There is no point desperately searching for ideas in a vacuum and without working with the very people you will rely on to affect any change. You need to know what your material issues are, where the likely big savings are going to be, and the right people to engage to set this all out. The engagement in the formulation of this strategy and its implementation should also help to align the different departments and improve cross working.
Encouragement
Culture is all. Ideas should be encouraged, indeed rewarded. If people know that ideas are welcomed, have guidance on where they may come from, and most importantly how they will be acted upon, the flow will be much greater.
Streamlined process
There needs to be a quick and transparent governance structure where ideas can reach the right people without the need for a network or connections. Decisions should then be taken quickly, and trial processes set out and easily followed. A formal process will allow ideas to be submitted and acted upon, without fear of redress or reproach.
Recognition
Whatever the outcome of any suggestion or trial programme, meaningful recognition should be given to all those involved, however junior and whatever their role, enabling and advising is just as critical as the initial idea. Not only will this mean people are likely to do it again, but those holding back may be encouraged to come forward. Recognition is also important for departments that may have seen a reduced budget as a result of project cost savings.
So, what is stopping your business from cutting waste? Probably capturing all the knowledge and ideas already in your business. Most businesses will tell you that their people are their most valuable asset (goodness knows I know this; in a consultancy it is our only asset). But if you truly believe this, you will do everything you can to maximise this hard won and hard kept talent and expertise. There is little that engages people more than truly feeling part of shaping the business.
To find out more about how Sancroft can help your business avoid waste and inefficiency please contact Felix Gummer.