“I understand how we calculate profit, but what does that have to do with my organizational chart?” Derrick asked.
“You design a predictable profit into your price, but what is it that keeps your profit predictable when you actually deliver your product or service?” I replied.
Derrick was thinking. “It becomes predictable when we are able to do the same thing over and over, the same way, with the same methods, in the same amount of time, with the same amount of scrap.”
“And how do you make all that happen over and over?”
“Well, we have designed a system and we train everyone to work the system.”
“And so, if something is happening with the predictability of your profit, what’s wrong, where do you look?” I continued.
“Something has to be wrong with the system,” Derrick nodded.
“So, where do you look?” I insisted.
“We should try to find out what’s wrong with the system.”
“Remember, I said that your problem is seldom a what, almost always a who?”
Derrick grinned. “So, that’s why you want to look at the org chart.”
I think every company must adhere to follow a system that is easy to understand yet complexed to design a strong business plan. Very interesting, thank you for sharing.