$4 million construction firm specializing in hospital work; 35 employees
Expenses varied tremendously from month to month with no clear controls.
Owner identified 3 line item expenses and created a “target” number for each. Appropriate department head was made responsible for the result and incentified to beat it. Daily or weekly report was generated by department head and submitted to owner.
Responsibility was effectively delegated to a key person for the expense; the required result was identified, the intermediate results were monitored, owner maintained comfort level of control yet authority to act was delegated. Each department head received bonus for exceeding target, profitability improved, and the program was expanded.
The Fremont Group, a non-profit organization, can be contacted regarding their work with this company.