Margin Improvement System (MIS)
Background:
Significant and ongoing improvement to operating margins can be achieved when a strong business system exists that:
- Clearly states and reinforces how important it is that all employees improve the business by implementing changes that save resources ($).
- Makes it easy for anyone’s idea to be considered, developed, and implemented.
- Shows appreciation to individuals for implementing new ways of doing things, while recognizing and showing everyone the positive impact that all changes have had on business performance.
MIS can be established in any business or business unit. It can be effective in a public, private, for or not for profit situation. The system will facilitate very real savings by providing a system and structure that can leverage leadership energy and the ideas of many employees. At the same time, genuine connection to the business can be created through the learning that takes place while implementing changes, the camaraderie resulting from many individuals working closely with management through implementation, and participants simply knowing that they made a difference.
MIS is not a typical “suggestion box” program where an idea is submitted
and some department or group decides what is a good idea and implements it. With this type of program, many ideas submitted are not acted upon and the originator never hears or really understands what became of the idea. As time goes on, interest and participation tends to fall off.
MIS is also not a “rewards” program where a percent of the savings realized by the business are returned to the idea originator for those changes that are implemented. Frequently there are more problems with this well intended approach than there are benefits. It can confirm to employees that making improvements really isn’t part of their job, so they get “paid” more if they do it. Also, rewards can be very large and this can cause resentment as other employees may feel cheated if they believe that they had the same or other similar ideas, but are receiving no reward.
MIS is a business system versus a “program”; it is ongoing versus short lived and appearing as a “flavor of the month”.
MIS helps get cost savings ideas generated, acted upon, and implemented. The following is established:
1) A Margin Improvement Committee (MIC) – a small group of leaders who will provide direction, resources, support and communication throughout the organization
2) A system of idea generation, development, submission, and implementation.
3) A Quarterly forum to recognize and reward individual and overall participation and achievement.
The key aspects to successful implementation are:
- Education and Training
- Overall Philosophy
- System Overview
- MIC Specific Training
- Mechanics of submission and implementation
- Leadership / Administration
- Selecting the Leaders
- Philosophy … who’s working for who?
- Energy and Communication
- Tracking results
- Appreciation and Recognition
- Individual and the Team
- Quarterly Events
- Annual Reviews, special recognition, setting the example
The Spear Group will define all aspects of MIS, providing education/training and operating guides as well as recommended forms and reporting formats.. We will provide the initial training, and help establish the MIC and appreciation/recognition system. We will coach the MIC to effectively lead MIS, seeing that the process is strongly established. We will offer follow-up evaluation and help as the customer requests.
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