Four Approaches to Increase Revenue per Headcount
Lean Six Sigma (L6S) has become part of the fabric of manufacturing. And, even healthcare has seen a decade of acclimation make a positive impact on quality and efficiency. However, many organizations in healthcare, retail, finance and other service-oriented industries have not fully tapped into the immense potential of L6S.
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Together, the two disciplines – Six Sigma and Lean – catalyze an organization’s journey towards the best customer-driven offering they can provide. Better yet, L6S enables your people to see the waste, share a future state vision, and collaborate on transforming delivery to the next level. Continuously.
One area that is of grave concern to every CEO and CIO that I know is revenue and profit per headcount. They regularly ask themselves, “Are we maximizing the productivity from our employees in a way that brings the greatest value to our customers?” They, also, want to know if they are under- or over-performing compared to Industry competitors.
That’s where L6S shines. Do you see any of these patterns in your organization?
- Silo-centric behavior is preventing the adoption of new technology to drive growth and competitive edge.
- Delivery teams are constantly complaining about being too busy or overworked and this isn’t reflected in sales growth.
- Decline in quality, and increased customer escalations, due to new hires brought in to support the increase in business.
- The total cost of quality has increased due to Iterative work, product returns, and increased field support costs.
- Project timeliness often requires heroics from delivery teams to meet customer demand.
- Cycle time fluctuates wildly from one project to the next.
For our clients who are focused on these goals and see revenue per headcount as a primary metric, here are our top four recommendations to increase productivity through L6S:
- Map Your Value Stream: Baseline your current state organization to understand where the value starts and stops in the process. Where are the opportunities to build your future state implementation plan with a focus on your customer?
- Find Abnormalities in Your Data: Look closely at the types of waste in your process to learn where you can eliminate unnecessary tasks and improve your first pass yield.
- Kick Start Fresh, Lean Thinking: Inspire continuous improvement in your organization by developing your own L6S program. Take on more of the difficult ‘change’ projects by empowering your team to solve it together as they learn a new skillset or discipline.
- Optimize Project Teams & Improve Cycle Time: Understand your TAKT time (aka customer demand) better and build project teams to optimize delivery wrapped around that demand. Eliminate wait time and inventory gaps due to poor load balancing and execution siloes.
The key to these four steps is that they require an outward-in view of your processes to ensure that what’s important to your customers is where you’re investing your energy. And, that you are diligently working to uncover the non-value activities pulling your productivity down and, which are irrelevant to your customers.
That’s the beauty and science behind Lean Six Sigma – creating a culture that continually focuses on value and hones processes and mindsets to achieve those values.
Not only can organizations achieve better productivity, customer satisfaction, and profit, but also they can re-focus reclaimed energy and resources towards innovation, new product development or other strategic priorities.