#Immediacy on speech making

Sometimes you knowingly adopt an expensive method because it is the only ...

Sometimes you knowingly adopt an expensive method because it is the only way to get the job done in time; next time you forget to tell your assistant not to do it that way. Circumstances are always changing in a business, and unless you make a deliberate effort to review your methods, you will find that what was the most economical method when you started may no longer be so.

For instance, through lack of cash or storage space in the beginning, you may have bought raw material in small lots.

Now your usage has increased, it 'would be more economical to buy in larger lots.

There may be new equipment available which is so much better that you could show a good pay-out on replacing your existing machines. As your business grows and you take on staff, you will find that some of them are not as cost-conscious as you. Why should they be it isn't their business.

Although you can train them to do things your way, the instinct is lacking and there will be times when they don't think the way you would. As a result, where you would automatically react to new circumstances, they will plod on doing things the way they were taught. Short, sharp shock I have experienced quite a number of cost-reduction programmes and have found that a pussy-foot approach to cost reduction is doomed to failure.

It seems to be essential to start the campaign with a short, sharp shock.

I think this stems from the supreme importance of creating the right psychological atmosphere needed to get the campaign off the ground. If you go around for months talking about cost reduction before you do anything, you create an impression among your staff that it is not very urgent. Some may think that an adequate response on their part is to go around for months giving lip service before they start to do anything.

To get effective action you have to jolt everyone out of their normal mental attitudes, get them out Of their ruts. You want them to start questioning everything about their job: 'Why am I doing this?' 'Is it essential?' 'What would happen if I stopped doing it?' 'Is there another way which might be cheaper?' Sometimes entrepreneurs hold back from starting a full-scale cost-reduction campaign because they fear it may have an adverse effect on their credit rating. On the contrary, the bank manager is more likely to be pleased than worried if a customer says he is about to start a cost-reduction campaign.

If well planned and carried out, such a campaign can only result ...

If well planned and carried out, such a campaign can only result in the business becoming financially stronger. He may even be able to suggest, from his broader experience, ... read more

Once the peak is reached, however, enthusiasm starts to wane. It is ...

Once the peak is reached, however, enthusiasm starts to wane. It is better to end the investigation with a few projects still to be tidied up than to let it drag on.... read more

Make a new list of cost elements, starting this time with the ...

Make a new list of cost elements, starting this time with the biggest item and then proceeding in descending order of size. At the bottom put 'minor items' to