Hazel’s Thursday Thoughts – The Whole Story


“Math is Everywhere!” is the mantra my friend, Debbie, tells her grade 6 students at an elementary school in Newmarket, Ontario. To illustrate this, she invites colleagues from industry to show how they use math in their workplaces.  A few months ago, I was invited to lead an energetic and enthusiastic group of kids through an exercise to demonstrate how I apply familiar math concepts to my client projects.  It was a great learning experience for me.

The students were tasked with designing a system to manufacture a paper based product to sell to their customers at a fixed price.   Debbie and I were the customers. The students were divided into teams and each team was given the necessary materials and tools such as paper, scissors, ruler, markers and paper clips to accomplish their task.  Here is where the math came in…. the winning team had to achieve the highest efficiency, which was essentially a measure of profits relative to costs.

Before beginning, we discussed systems and the two key components of the equation, costs and revenues. The fixed costs were represented by scissors, ruler and markers, and the variable costs represented by paper, paper clips and labour.  There was a disparity in the number of students per team; some had 6 while others had 5. Without prompting, the kids figured out that, with all else being equal, the teams of 6 were at a potential labour cost disadvantage.  I explained that the revenue side of the equation was highly influenced by customer satisfaction, therefore, if Debbie and I did not accept their product their revenues would be nil. Through this discourse, they realized that while a larger group posed a disadvantage on the cost side, larger teams could in theory make more products and thus increase revenues.  I must admit that I was impressed with how quickly they grasped the concepts. So, armed with this preliminary knowledge the teams were ready to begin.

In the first round, teams’ performances were not great.  Poor product quality resulted in little, or no revenues and significantly high costs due to wastage. The team that won achieved an efficiency of 11% while all the other teams had values with varying negative magnitudes. As the winning team celebrated, I had to remind them that 11%, while positive, was not an operationally effective or efficient result. Prior to beginning the second round, I instructed them on the best practice for making a quality product. This provided them with a better process for their system

It is the change in their approach to this second round that provided the impetus for my Thursday Thought.

All the teams decided to make operational changes by adjusting the cost side of the equation.  Many of them chose to downsize to reduce costs. They also found other ways to cut the paper to eliminate scissor use, and to fold the paper so they didn’t have to use the ruler. However, teams that stopped there only achieved a marginal improvement in overall efficiency. The winning team made no headcount adjustments. Instead with the existing members they optimized their system to increase the number and quality (we accepted all their products this time!) of their products.  They worked on both the cost side, and the revenue side of the equation.

Does this situation sound familiar?  If so, please raise your hand. How many of us have observed, or been collateral damage of, downsizing efforts that left significant gaps in work execution and produced unsatisfactory results? Why are some businesses making decisions that employ the same reasoning as 6 graders who have yet to enter the job market?

To achieve immediate results, we oftentimes take the path of least resistance, which can sub optimize the overall goals while gaining immediate benefits that are unstainable.  I am not saying that cost cutting initiatives are unnecessary, what I challenge organizations to do is to make effective decisions based on understanding how the work gets done and not solely on the resources used to accomplish the work.

About the Author: Hazel

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