It’s everybody’s job

There is a popular TV game show where the host frequently shouts out, “Survey says!” Well, the recent surveys on the green industry all seem to point to one overriding concern—the cost of production.

While business has been improving, it is growing at a slow pace and margins continue to be challenged. As a grower, your best effort at improving margins is not on the price side—it’s on controlling the costs. But how can you really do that?

Restaurants, retail stores and distribution centers realized years ago that cost control has to be everyone’s job. The line cook has to constantly pay attention to food portions. The store clerk has to minimize the number of shopping bags she wastes, and the distribution center forklift driver knows that how he maintains the equipment translates into more money on the bottom line.

Here is the key; you have to build in cost conscientiousness at every job. When you’re purchasing stock or supplies, can you save money on delivery by how you bundle the order? How can you cut a few pennies off the cost of every plant you harvest by how you plant them to begin with?

It’s doubtful you will find one function where you can save thousands with just one decision. The opportunity lies in saving a little at every point of production. This means that every employee has to be trained in staying alert for even the smallest savings.

The late Sam Walton was a pioneer of this strategy. As a young management trainee with JC Penny, he was taught how to wrap the customers purchases in paper and string (before the widespread use of shopping bags). Years later, when he owned his own stores he remembered the admonition that “at JC Penny we make money by the paper and string we save.” This drove his passion for driving out waste and unnecessary costs. And that passion led to profit per linear foot that remains unmatched to this day.

But you don’t have to be the size of Walmart to implement this idea. First, identify the critical path your products take from entry to sale. Make sure you have documented every unique step whether in the ground, the greenhouse or the warehouse.

Second, train your staff to constantly be asking, “How can I save on supplies, tools or manpower without sacrificing quality?” Look for pennies not dollars. You have to be relentless. It is not a “once and done.” It is instead, “all day every day.”

Third, you must build in a weekly review of what your workers are finding. Document any improvement they suggest and measure its impact and the savings. Once an idea has proven effective, build it into your written processes and review it regularly for compliance. You are probably thinking, “I barely have enough hands to get the work done, let alone any kind of quality improvement effort.” But remember this declaration more than three decades ago by Phil Crosby, “Quality is free!” He is still right. Whatever investment you make in improving quality while driving down costs will always produce a healthier bottom line that will not only pay for the effort, it will produce a greater profit.

When the game show announcer shouts, “Survey says!” the giant board on the screen reveals the top answers to his question. If the question is how to control production costs, then the top answer is: build a culture of constant cost awareness by every worker. And one more thing, recognize and reward every idea that reduces costs while keeping quality high. In other words, as management guru Tom Peters suggests, celebrate the behavior you want to see more of.

Barry Banther is a best-selling author and founder of The Family Business Advantage, an online tool for families who want to work together in business and live together in harmony. Visit www.barrybanther.com and see a video that goes deeper into this topic.