Here at Columbia, we perform what we call “Economic Audits”. However, after spending time with a client in San Diego last week, I am considering changing the term to “Opportunity Cost Audit”. This economic term is my personal favorite, as it allows you to understand if your business is achieving the maximum opportunity.
I learned last week that the opportunity does not have to be strictly economic. Opportunity cost can be measured and reported out with all aspects of operations starting with financials; however, it extends to service and even engagement from your team. Nor is this simply a theory, rather it’s logic. We report out the opportunity as a truth table, using if-then statements. For example, in San Diego, the challenge was to convince the team to work together in getting delivery drivers out on time. A series of truth statements were created that detailed benefits which were beneficial for all (win-win). The next step was to identify the roadblocks to achieving the on-time departure. We identified who could do what and when to remove the road block, developed a plan and then executed that plan. Upon the successful execution we checked off each truth statement as they turned into facts.
One such truth statement was “If the teams depart on-time, then on-road exceptions will be reduced by 10%” for this location. With ten delivery trucks it equated to ten less phone calls required to address an on-road issue, at the average time of 15 minutes, thus achieving 150 minutes of time back in the day for the office staff, among other benefits.
By the end of the project, the exception handling was down 16%. Similarly, if-then statements were created for financials and NPS results. At the end my time there, all were achieved successfully. I leave you with this truth statement: If you contact Columbia for an Opportunity Cost Audit, then you will allow your hidden opportunities to be identified and realized! Columbia is located in Chicago; however, we travel nationally to your business.