The biggest mistake that Companies make that stops them from being successful

when i use the word company or organisation below what i really mean is the owner or executives!

Of course they are many mistakes that individuals and companies make each and every day but the biggest mistake I feel a company can make is,

creating a system whereby the line level but especially entry level management staff do not have the direct authority to spend budgeted moneys on supplies and items that are critical to operating and growing the business and enjoyment for the employees.

this results in poor employee engagement and pride.

When an individual can’t make progress and doesn't feel their voice is heard they revert back to not caring.

This happens because,

1. The person authorized to approve and spend money is so far removed from actually doing the work they can not fully appreciate, or dont have the technical knowledge to understand the importance of items needed to operate.
2. companies are scared that individuals will steal if given authority to spend money.
3. companies do not want to share revenue information so that employees wont ask for pay increases.
4. companies don’t realize that most times every dollar spent effectively will actually save or create significantly more revenue than it costs. So when companies focus on less than more how can employees break that vicious circle.
5. most companies make the process so complicated or stressful because of delays or multiple steps that it is easier to not to ask next time than go through the process again. this is like the captured grasshopper who gets so used to hitting the lid of the jar that after a while they give up jumping even when the lid is removed!

you can cut to save money but you can’t cut your way to success!

Some examples,

I've worked in both operations and sales and here are some examples of what i mean.

1. machinery and equipment fail or wear out without replacement. when they get ‘yelled at’ for not taking care of the equipment they rather keep their mouth shut than ask for money to maintain or repair equipment.
2. equipment breaks down at the worst possible time which directly affects revenue collection because noone wanted to spend preventive money
3. paint peels or fades, algae grows or weeds grow which become the norm. this deviance from normal becomes standard in the minds and hearts of all.
4. A water leak doesn't get fixed because it may cost a few hundred dollars but actually ends up costing 100x more in a year causing structural damage
5. employees are not given adequate initial or ongoing training time to make improvements and progress in their job or company.
6. the list can go on, add yours examples below

Its not a budget its a spending plan!

How to change

explain to all employees that the number one responsibility of any company to its employees is to be profitable, so they can do more than meet payroll!

1. Call it a spending plan not a budget. never use the word budget again!
2. dont send mixed messages by saying it ‘not in the budget’ one day and the next saying the budget is not ‘written in stone’
3. set up a simple process with as few steps as possible, that informs individuals how to spend money and what items can be purchased and what can’t.
4. share the information in dashboards and communications that is easy for individuals to see how much they can spend and when they get close to limits and when limits are exceeded within a period such as a month or quarter- they will get used to waiting a few days for the next spending period if they can’t exceed their spending limit.
5. make a simple requisition form for all individuals to submit requests for operating expenses and allow them to justify the expense based cost savings or revenue growth and how much it exceeds the expense based on % of revenues and needs.
6. make your spending plan a dollar amount that is based on a percentage of your revenues, so if revenues dip you still dont spend more than is absolutely necessary. for example, cleaning supplies for the period can be no more than 5% of the forecasted and real revenue for the period.
7. update your real revenues so that all understand why they can’t spend money that exceeds their limit. this is much better than having no clue why budgeted money doesn't get spent!
8. reward individuals for not exceeding their spending limits at the end of a spending period such as annually.
9. Educate all employees that most times cheaper is not always best. spend time on training people to research the best product, how to get the best price for the best product and how to get the exact scope of the job when requesting estimates.
10. Involve all or most of the individuals in the creation of the spending plan and then use the actual expenses to build the following year spending plan.
11. create a 1% improvement form where all employees are rewarded when suggestions to improve their work environment are implemented in their job, by being effective and efficient even if its only by 1%!
12. Expect some mistakes and adjust accordingly. dont throw the baby out with the dirty bath water!

my challenge to corporate america (actually the world) is to adopt most or all the suggestions above. When an individual can buy a $25 can of paint or $5 of cleaning supplies to make their guest or working environment top class they are likely to take care of the customer directly and indirectly, work with few mistakes and create a safer working environment.