If you talk to many companies they will tell you that the competition is tough and margins are thin. Others will quietly smile and you know they’ve found a secret source of profits. That’s often the 1% Rule
Last week I spent a few days in Singapore talking to a number of very different engineering companies. Like most of our customers they live in a very competitive environment. Most of their costs are steel plate and they are constantly trapped between low cost Chinese competitors and high value added european companies.
Each had it’s own approach to beating the competition and finding growth. Some diversified; some specialised. Some looked to other countries, others sought new markets at home. Some cut prices, others invested in R&D
This set me to thinking about how we at Oakley Steel compete. There are two answers to this. One’s obvious and the other is less so.
The obvious answer is in the steel that we stock:
- We have more heavy plates than anyone else
- We have thicker plates than almost anyone else, and
- We are always pushing the technological limit – our standard plates are custom made (it sounds better in Dutch – “Zelfs onze standaardplaten zijn maatwerk” )
That’s great, but if someone entered the market with $50 million they could have the same amount of steel. They wouldn’t be as good though, and this is why:
The 1% Rule
We have a simple rule for every single person in the company. It’s the 1% rule. Everyone has to improve their job by 1% each day. They look at their daily tasks and see how they can improve it by just a little bit.
For Santhi, who many of you know, Friday’s improvement was changing her email signature. For me today it was making some small updates to our stock management programme. Senay looked at how she told customer’s about shipping options.Everyone does something every day. Something small.
This has a massive impact for two reasons. First small changes are easy to try and put into practice. They don’t require time, money or management approval.
Secondly it’s the power of compound interest. A 1% improvement doesn’t mean a 365% improvement by the end of the year. It means a 3778% improvement. That’s huge!
So yes life is tough if you focus on the big things like how to sell 20 more vessels or 5 more modules than last year. If you focus on the small things you often find that the big ones aren’t that large after all. Of course the idea is easy – getting everyone to commit is hard – buts thats a post for another day.
Let me know what 1% improvement you could make at your company