Profit Building: Cutting Costs Without Cutting People (Hardcover)

~ (Author) "In our businesses, we are continually challenged to reshape our organizations in order to utilize and preserve the resources that fuel profitability..." (more)
Key Phrases: profit building process, improvement paradox, questions brainstorming, Organizational Complexity Predictor, Large-Group Discussion, Pizza Hut (more...)

Editorial Reviews

Product Description

Improving Profit is the number one objective of business leaders, yet most do not truly understand how to move beyond the basics when it comes to cost reduction for profit improvement. Typically, a company’s response to reducing cost is to reduce the workforce. People are laid off in large numbers and dollars are saved--or so it seems. This is a mistake, a short-term solution. Profit Building provides a better approach, one that focuses on profit improvement as a stand-alone process, demonstrating how an organization can achieve its goals to improve profitability and reduce cost through a proven method based on team innovation management.

Perry J. Ludy offers a hands-on guide that shows managers how to move profit and loss financial reviews beyond the basics to creative solutions and genuine action plans. Using the author’s five-step Profit Building Process (PBP), Profit Building shows how to organize teams with the specific purpose of improving profit--while providing an opportunity for employees to participate in developing cost reduction strategies so that profit improvement is perpetual.

A system of step-by-step activities designed to produce immediate and continuous results, the PBP shows managers how to apply concepts from prior learning--such as teams, innovation management, and performance improvement planning--to create tailor-made strategies for any organization. And it introduces "Questions Brainstorming," a new twist to traditional brainstorming that fosters avid group participation resulting in better solutions.

In order to achieve success beyond today, business leaders must leverage all resources available within the organization to improve profit, reduce cost, and create a better place to work. Profit Building is an executive handbook and a quick desk reference for managers that shows how to do just that.

From the Publisher

"Profit Building is a clear, easy-to-read book on how any organization can achieve profit improvement. Ludy has included real-world examples, coupled with his many years of management experience, to illustrate how using a systematic approach, a company can find innovative solutions and ideas to reduce costs."Lionel L. Nowell, III, Senior Vice President and Controller, PepsiCo, Inc.

"Applying these concepts can dramatically impact organizational change and profitability. Ludy has synthesized his key business principles into a boilerplate process that can be applied to any business. The system is laid out in a concise step-by-step fashion designed to walk you through the procedures."Brion G. Grube, Senior Vice President of Operations, Wendys Restaurants of Canada, Inc.

"Profit Building is clear and concise from the first page to the end of the final appendix. . . . A timely aid for managers, at any level, who are interested in successful organizational innovation."Hala Moddelmog, President, Churchs Chicken

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Product Details

• Hardcover: 162 pages
• Publisher: Berrett-Koehler Publishers; 1st edition (January 15, 2000)
• Language: English
• ISBN-10: 1576751082
• ISBN-13: 978-1576751084
• Product Dimensions: 9.3 x 6.1 x 0.9 inches
• Shipping Weight: 15.2 ounces (View shipping rates and policies)
• Average Customer Review: 4.7 out of 5 stars  See all reviews (17 customer reviews)
• Amazon.com Sales Rank: #600,178 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

9 of 9 people found the following review helpful:

5.0 out of 5 stars Build-Up Profit Improving Skill Rather than Having Lay-offs!, March 4, 2001

By	Professor Donald Mitchell "Jesus Makes Me a P... (Boston) - See all my reviews (TOP 10 REVIEWER)

As one CEO said to me recently, "No one who has a conscience ever wants to lay anyone off." Yet the headlines are filled with announcements that companies are making massive cuts in jobs and employees. Recently, these cuts are even coming in the fastest growing technology industries. If people don't like to fire anyone and people don't like to be fired, why is this happening?

Mr. Ludy argues that faced with missing budgets, the orders come down to spend less. Most people do know how to fire someone, so that option gets plenty of attention. Most people do not know many other ways to cut costs or boost profits in the short term, so the alternatives get little attention.

Our firm did a study more than a decade ago that has been quoted in dozens of books and magazine articles. We found that the stocks of companies which did layoffs usually underperformed the stocks of companies that did not. By the end of four years, the differences were enormous in favor of those who did not do layoffs.

Many people believe that this is because people do layoffs poorly, and many people do. But it also because the effort that goes into the layoffs could be better deployed in activities that increase profits. Usually, the bulk of those who go are the most employable people. They end up working for the competition, or having to be hired back as expensive consultants. How does either alternative help, while you are paying severance benefits as an additional cost?

Mr. Ludy points out, based on his extensive experience, that most executives, managers, and supervisors know little about profit improving.

Much of the recent training in companies has been on how to reduce errors, and that may help cut costs in main processes. That learning is often of little help in secondary processes and in areas where the processes need to be totally replaced, revised, or outsourced. Xerox and Motorola are both famed for their quality processes, and both companies are struggling now to make a profit.

Mr. Ludy has developed a process described in the book that helps to get people focusing on the best opportunities, and following through to implement the opportunites that they select. He also provides lists of items which many companies ignore, to help get the process started.

Although I have not seen this process working in practice, it is similar enough to elements of successful processes I have seen that is has credibility to me.

If you decide to pursue this process, I suggest that you can improve upon it. First, rather than just having one small team working on this, you should try to get as many people working in small teams as possible. The most successful profit-improvement program I ever saw involved over 14,000 people in suggesting ideas. Second, be sure to compare the performance you are achieving in one part of the company with what you are achieving in another part of the company in the same activity. Most large companies get their best ideas from benchmarking to their own best practices. Third, be sure to create an e-intelligence capability to get more information to everyone about how the company is performing. E-Business Intelligence is a book that can help you understand this point better.

The three strengths of Mr. Ludy's process to me are:

1. The emphasis on finding ways to improve profits, without hurting people.

2. Training people about how to improve profits.

3. Eliciting questions to locate opportunities.

In regard to the second point, you may find it helpful to read Dr. Ram Charan's new book as well, What the CEO Wants You to Know. That book focuses on simple business concepts and metaphors to make everyone better able to relate to the issues of the enterprise.

One of the major weaknesses of companies is that leaders are often asked to pursue tasks for which they do not have relevant information, experience, or training. Where else does your company have this issue? In my experience, two areas stand out.

(1) Finding better solutions to repetitive problems.

(2) Choosing directions that will lead to better results, regardless of business conditions.

May you find more intelligent, and more humane, ways to profit!

4 of 4 people found the following review helpful:

5.0 out of 5 stars A Business Communications Tool, October 9, 2000

By	Carolyn DeVinny "Woman Walking" (Los Angeles, CA USA) - See all my reviews (REAL NAME)

As a corporate management communications and marketing consultant, my firm is often asked to help managers discuss cost cutting campaigns with their staff. Perry Ludy's book is the perfect primer to serve as the basis for such projects. While keeping the bottom line front and foremost, the premise of the book is employee involvement. Using the techniques in Profit Building, good management communications literally fall into place. I am ordering copies for two current client projects and will be looking for ways to weave it in to additional work.

2 of 2 people found the following review helpful:

5.0 out of 5 stars A new standard of excellence, October 22, 2000

By	Frank Basler, Organization Development Consultant (Westport, CT USA) - See all my reviews

Perry Ludy has written a dramatic wake-up call for any manager responsible for bottom line results. In recent years we have learned how to improve most business processes significantly using work redesign, teams, quality and other tools. But few managers apply these proven approaches to profit building as a standalone process.

From his own extensive experience managing both staff groups and a variety of line organizations, Ludy provides practical guidance for involving employees in focused cost reduction and profit building initiatives. He points us toward new stands of excellence for managing in this twenty-first century.