1. Imagine a business with sales 100, costs 90, EBIT 10.
Multiply the numbers by any scaling factor the ratios
do not change. Imagine sales improved 5%, costs
reduced 5%. Sales 105, costs 89.8 (on increased
sales). EBIT is 15.2, 52% increase.
Now, imagine a business with sales 100, costs 96,
EBIT 4. Then improve sales 5%, reduce costs 5%, so
sales 105, costs 95.8, EBIT 9.2, 130% increase.
Chances are your business falls in the range of EBIT
between 4% and 10%. Which means with 5% chang-
es in sales and costs you could improve your profit
by between 52% and 130%.
The large profit gains arising from small changes in
sales and costs is due the multiplier effect that is
profit is the small difference between two much
larger numbers. Quite small changes in the large
numbers can dramatically improve profits.
We can do the numbers on more modest targets.
Imagine sales increased 2%, cost reduced 2%. With
opening EBIT of 10, then it is increased to 12.04,
20% increase. With opening EBIT of 4, then it is
increased to 6.04, 50% increase.
We all know how hard it is to generate these extra
gains, what I call gains at the edge. By that I mean
they are at the edge of what people usually willingly
do. To get beyond sort of ‘normal’ result, typically
requires intense effort by the team leaders to ‘stay on
top of it’. But once that effort released, as it must be,
results slide back to the ’normal’ result, or worse,
depending on how hard the leaders pushed and the
extent they managed to upset the team.
We now have the crucial question: Could human performance
be improved to increase sales and reduce costs by 2% without
disturbing the operational balance of your business and without
the need for team leaders to ‘push’?
Better science produces better technology enabling better
results
Unless you are deeply familiar with OPD theory you will not
have a clear and definite theory of how human behavior on the
job is directly linked to the profit and loss.
As a species, we can only act in accordance with what we
know and understand. The general theory of psychology states
we choose and apply ideas to manage circumstances we face. If
the ideas are not deliberately selected, then we are acting from
habit based on ideas we have learned and have used in the past.
The intensity of action depending on the emotions associated
with the ideas.
You may well think you are clear on how to link staff daily
actions with the goals. But the clarity can only be based on
current global best practice thinking of how people are linked
to the P&L. Global best practice is just a popular set of ideas.
Being popular does not make ideas correct. At one time it was
popular the earth was flat, and the center of the universe.
We always have two choices. First, we accept our ideas as the
tools we apply to manage circumstances we face and get the
result we seek. This leaves the option of exploring new ideas
that deliver a better result. Second, we adopt ideas the same as
everyone adopts. We embrace the ideas accepted and applied
by the group and we are committed to those ideas. This means
we are not likely to change our ideas unless everyone is chang-
ing.
People ARE your greatest resource
Investing in OPD-HCD™ is investing in the only scientific link between
people and the organization
Science is the activity of refining the ideas we use, proving they
work in practice, and then guiding distribution so everyone can
enjoy the improved theory and improved results.
The set of ideas people adopt to orientate themselves to the cir-
cumstances of their life I call their ‘personal theory’. The nature
of those ideas sets the direction of any action, and the passion
and enthusiasm with which they are enacted determines the
intensity of the action and momentum. I describe a person’s
current ideas as the ‘set of the sail’, and the associated emotions
as putting the ‘wind in the sail’. Change the set, change direc-
tion, change the passion, change the momentum.
OPD theory is a detailed theory of the exact nature of the link
between a staff members mind and the goals in the job linked to
strategy; it is built from a general theory of psychology, itself
derived from a redesigned methodology of social science. It is
theory, but from the above you can see we all act on theory, that
is on the ideas we apply to circumstance. Therefore, the more
apt, more accurate and more appropriate the ideas (the theory),
the more effective our actions.
Investing in your people is the most significant project avail-
able to your business
OPD-HCD™ is the technology derived from OPD theory. It
offers new thinking on linking people to the strategy and to the
current business plan.
Regardless of all other HR global best practice you
may apply, OPD-HCD™ is proven to lift human
performance 10-15%. From our experience with cli-
ents we know that a lift in human performance of 10%
will increase sales by 3-5%, reduce direct costs 2-4%,
and reduce overhead costs 1-3%. You can do the
numbers to assess the gain in EBIT by applying it in
your business.
In addition, the theory enables these gains with the
full support of people, who find the theory useful and
enabling greater work fulfilment.
Questions for reflection
1. Could staff performance be improved 10%?
2. What is the gain in EBITDA of your business
if sales increased 4% and costs reduced 4%.?
3. Is the increase in EBITDA sufficient for you
to consider going after it?
4. What would your business ‘feel like’ with
40% increase in EBITDA, more satisfied and
fulfilled staff, and more content and relaxed
leadership and governance?
Newsletter 2
How to double profitsNewsletter topics
1. Seeking new thinking.
2. How to double profits.
3. Goal—action.
4. Linking staff action to
strategy.
5. Human performance
driving results.
6. HR as rollout of strate-
gy.
7. Behavioral structure of
the organization.
8. Understanding human
psychology.
9. Linking people to be-
havioral structure.
10. Perfect human perfor-
mance.
11. Performance manage-
ment moving actual
toward perfect perfor-
mance.
12. Built in flexibility.
13. A scientifically proven
balanced solution to
human performance
as a driver of results.
14. Redefining engage-
ment.
15. Culture.
16. All HR policy changes.
17. Lifting expectation.
18. Redefining leadership.
19. Redefining manage-
ment.
20. Why has it not been
done before?
21. Stop. Reflect. Chose
and improve.
22. Why can’t we do it
ourselves?
23. Mind of the CEO.
24. HR as the ‘right hand’
of the CEO.
25. Building a ‘verbal
ready’ Executive.
26. Understanding human
motivation.
27. Building and imple-
menting an integrated
motivation policy.
28. Human capital.
29. Finding and develop-
ing talent.
30. Choosing better ideas.
Reading these newsletters you will gain
new insight into how to manage the link
between people and your organization so
that both benefit by increased results,
greater success, increased profits, more
fulfilling work, and greater satisfaction.
Contact: info@opdcoach.com to meet and explore how this system will lift results in your business.
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