Put Your Company on The Wall Street Diet
 Businesses, like dieters, use fads to take off the weight. But according to a new book by CSC authors, lifestyle change, not crash dieting, is necessary to keep it off.
"It’s important to take an integrated approach to health," says Charles Poirier, coauthor of The Wall Street Diet. "If you want to become lean, you have to change your lifestyle." Poirier, a CSC consulting partner, cowrote the book with Mike Bauer, CSC’s director of the Center for the Lean Enterprise, and William Houser, president of Integrated Productivity and Quality Systems. The book argues that if businesses adopt many of the principles followed by successful human dieters, they could gain five to eight points on the bottom line.
“A business, like a dieter, should begin with a checkup, to find the best starting point for their efforts,” Bauer says. The Wall Street Diet begins with a diagnostic checkup for businesses. Too often, businesses embrace quick fixes that don’t address real problems — cutting employees or adopting only one program, such as just-in-time inventory. They see temporary improvement, but soon the fat is back.
"We want you to build a company that is healthy in 50 years as well as five," the book says. It adds that a healthy business lifestyle combines business and IT management concepts including advanced supply chains, lean manufacturing, selective outsourcing, customer intelligence and quality efforts such as Six Sigma.
Ingredients for a healthy business
Dieters worry more about more than their weight — they also worry about how fat and cholesterol affect their arteries. "The circulatory system of an enterprise is its supply chain, which delivers goods and services and links companies together," the book says. "A supply chain clogged with unnecessary inventory (fat) puts a strain on the entire enterprise."
The authors stress supply chain improvement as an important way to streamline operations. Supply chain evolution is guided by the five supply chain management levels identified by Poirier, who has written several supply chain books. At the lowest level, companies gain internal efficiency. At the highest levels, they collaborate with trading partners and suppliers. When businesses work closely with partners, excess inventory starts to go away.
Another part of the Wall Street Diet is a focus on lean activities — in other words, avoiding any activity that doesn’t add value to the business. To help businesses determine how lean they are, the authors have developed a business version of the Body Mass Indicator, which measures body fat. Finding fat is much more complicated in a business than in a human, so the Business BMI asks businesses to rate their leanness in areas such as design and development, customer service, manufacturing and logistics.
The book shows one benefit of lean beyond the plant floor with a CSC project for a large aerospace and defense contractor seeking to improve the supply chain for a fighter aircraft. By adopting lean warehousing and Six Sigma techniques, the contractor achieved a 40 percent reduction in manpower costs, a 10 percent increase in aircraft availability, and a £400 million cost cut for a European air force customer.
Quality programs like Six Sigma and ISO standards help businesses find and resolve issues that hinder business goals. If the Wall Street Diet is to work, businesses have to commit to quality. However, the book says, businesses tend to focus exclusively on such programs. Too much time spent on quality is almost as bad for a business as not focusing on it at all. "If you’re a mid-sized company, Six Sigma could bankrupt you if you’re not careful," Poirier says. The book gives concrete advice to help businesses use their quality programs effectively.
The most painful part of the Wall Street Diet, the authors say, is when a department must ask itself: can someone else do this better than we can? Outsourcing is a critical part of the diet because, as with physical diets, there are always times when it’s better to get others involved. Selective outsourcing is a way for organizations to trim waste, to pay only for the services they need.
But outsourcing fundamentally changes an organization. There are frequently human costs. "As a new way of working for most people, outsourcing is the area where we will uncover profound resistance to the diet regimen," the book says. The Wall Street Diet lays out strategies for successful outsourcing — among them, creating tighter relationships with suppliers.
At this point in the diet, the business may have cut a lot of weight. But it’s then important to adopt a lifestyle that will allow it to keep those gains. One of those ways is for businesses to focus on the customer. The authors recommend customer relationship management, and specifically customer intelligence, as a way to build revenue. As a business cleans up its processes, it will start collecting information about customers and their orders. "The firm must analyze the tremendous amounts of customer data so that it becomes a source of customer knowledge and can anticipate and react to market conditions better than any competitor," the book says.
In order for the Wall Street Diet to work, businesses must make it permanent. Rather than viewing it as simply a collection of trends, they need to make the diet part of their business plans. Sometimes businesses will fall off the diet, overindulge and give up. "That is not the approach," the book says. "Our advice to you, the business dieter, is just start again."
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