Friday, Jun 20, 2008
Design research reaps $1.6M in organizational change
The obvious answer to a problem is not necessarily the correct answer. Research not only saves money, but can reap huge, systemic rewards.
Strategy+Business has a case study illustrating the impact of evidence- and research-based change.
In the case study, employee morale dropped, bringing gloom and doom. In response, management thought to boost salaries.
Unfortunately, after interviewing employees, Core Practice Partners discovered employees were happy with their current pay. Their unhappiness rose from unpredictable overtime schedules and a lack of close communication with management.
Employees felt management didn’t care.
The solution? First, change shift schedules so they were predictable for employees and still gave management the flexibility to adapt production capacity. Second, get management on the floor to talk with employees on a day-to-day basis.
Compared to raising salaries, those solutions are cheap.
The obvious answer is not necessarily right. In this example, the company saved tons of money because they didn’t need to raise salaries. They earned other benefits as well.
John Frehse, “It’s not about the money”, Strategy+Business, June 10, 2008.”...the manufacturing firm realized more than US$1.6 million in combined cost savings and new profit during this process, with $675,000 directly related to morale improvements, including lower training and recruiting expenses due to a decline in worker turnover and gains in productivity.”
On the web, we have our own “boost salaries”. Common knee-jerk responses include add more ads, add more features, change the price, and change the visual design.
I bet nine times out of ten, those four options are the expensive, wrong option. But they’re well-accepted and safe.
To succeed against the well-accepted and safe, you need trust so you can do the research and implement the “scary”, untested new idea.
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