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May I Make A Suggestion?
The best way of cutting costs on the job is to ask the person who does the job how to do it. And at least a couple of financial institutions we have heard of have discovered an excellent way of finding ideas on how to cut costs.
Perpetual Financial Corporation in Vienna, Virginia started a suggestion prize program called "Bright Ideas." Points were assigned in relation to dollars saved, and items could be ordered from a special catalog.
These items were interesting, to say the least. You could order clothes, or a computer, or furniture (one employee furnished her entire apartment on suggestions), or even a grand piano!
From January through April of this year 85% of Perpetual's 1,600 employees participated in the program. 34% of the ideas were accepted and implemented, saving Perpetual more than $5 million.
What kind of ideas?
One staff member suggested that toner cartridges on fax machines be refilled rather than replaced, saving more than $15,000 a year. Another spotted an antique oriental rug in an office no longer used, and suggested it be sold. It was-for $100,000. A welcome suggestion was reducing the number of managers who received in-house financial reports. Tellers recommended adding training personnel and procedures to shorten training time. It was suggested and implemented for paper stock to be changed to a lighter, less expensive grade.
Sovran Financial Corp. in Norfolk, VA also got on the suggestion band wagon, offering a program called "Ideabank." They give employees 10% to 15% of the first year's savings on any accepted idea. They report about 15% turn out to be winners. Two full time staffers evaluate 70 suggestions a month. They are most pleased when the suggestion boosts quality service. Some of the ideas?
When the cash drawers in the automated teller machines were sticking in cold weather, Sovran considered installing heaters for each unit, costing about $1,200 per machine. A teller suggested that they simply run a light-bulb circuit inside each cash drawer to keep it warm. That cost about $100 per machine.
Another employee suggested sending employee bank statements through internal mail rather than through the U.S. Mail. This suggestion meant a $4,500 award for her, and saved Sovran an estimated $45,000.
When someone says, "May I make a suggestion?"-It might pay to listen!
Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 8, 8/90
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