Why Being Timely Can Change Your Profit Margin by David

Does your business suffer from inefficiencies? If the answer isn’t yes, you’re kidding yourself. No business on earth operates at 100% efficiency, 100% of the time. The good news is, if your business functions can improve, so can your bottom line, which means more money in your pocket.

You might be thinking to yourself, “Ok, what’s the catch, what massive effort will it take to see those rewards?

The answer lies in the question itself, or rather, the perspective behind the question. Let me explain, people have been conditioned to think massive results require massive effort. However, the truth is much different, massive require only minor effort. The power lies in compounding, the process of reallocating newly acquired resources toward the original goal over an extended period. The process is similar to multiplication; however, it adds the extra component of time to the equation.

To illustrate how compounding works, let’s ask another question; what would you rather have, $1,000,000 right now, or would you rather start with $0.01 today and double your money for 30 days?It may seem like a silly question at first glance, but when the secret sauce of compounding is added to the $0.01 over 30 days, you’d end up with OVER $5,000,000 DOLLARS ($5,368,709.12 to be exact).

Why Being Timely Can Change Your Profit Margin

With that in mind, back to the main focus, fixing company inefficiencies with minor effort. We should discuss what “minor” constitutes, and we’ll go with the direct definition “lesser in importance, seriousness, or significance. Synonyms: slight, small.” Those last 2 words are the key, slight and small, meaning nothing requiring more than minimal effort.

Now, where to place this minimal effort. Think basic here, as a rule of thumb I like to think of each day like a job interview. What are the basic rules of a job interview (if you want to get hired)?

  • Be on time
  • Dress for the part
  • Don’t smell like a garbage bag
  • Be prepared with a copy of your résumé
  • Be in a good mood

Notice, all of those things can be tended to on a daily basis, and are, by most people.

Imagine a fortune 500 company hiring a new middle manager. Do you picture a well-dressed man or woman, arriving slightly early, with a smile on their face and a résumé in their hard? Or, do you picture a person with holes in their clothes stumbling in 20 minutes late with a scowl on their face? You’ll agree, the combination of differences paints 2 very dissimilar portraits.

Extrapolate this example to your busy. Are all of your employees on time (if not early)? Are they all dressed well (enough)? Do they have proper hygiene? Are they prepared for the day?

Remember, these questions should be asked on a daily basis, and this is where compounding comes back into the equation. If someone is late just 8 minutes each day, that’s 40 minutes per week, 160 minutes per month, 1,920 minutes per year… 32 HOURS! Almost an entire work week is lost to “just 8 minutes”.

In 2009, the World Health Organization’s Safe Surgery Saves Lives program, a research study examining the effect of small procedural changes in hospital operating rooms, showed death rates fall by 40% when all team members adhered to a set checklist of minor procedural policy changes. The most impactful takeaway from the study, a single procedural change couldn’t be linked to the massive results, therefore leading the researchers to conclude the combination of minor changes was the catalyst.

If you’d like to read more of this subject, I highly recommend Broken Windows, Broken Business by Michael Levine. It dives deeper into business particulars regarding minor changes as well as the psychological reasons behind why the changes work over time.

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