THE OPERATIONS PROCESS
raise a yellow flag for manufacturing: What will the added costs be? Will it entail overtime? Other functions raise further questions. After everyone’s had his or her say, the group breaks up for an hour, and each manager discusses the information with his subteam. The manufacturing people, for exam ple, will figure out how much they can cut costs given the higher volume and therefore how much room there is to reduce prices. They’ll talk about alternatives: Should they add a third shift, or outsource? Where will they secure more components? When the groups reconvene, they all load their infor mation into a common computer spreadsheet program. Within moments they have a picture of what this budget would look like. They can see in real time what makes sense and what doesn’t, and how well all of the compo nents synchronize. Then they’ll go through the process again, questioning, reshaping, and refining. Usually they’re finished after four cycles. They’ve got their basic budget and operating plans; they’ll fill the rest of the budget lines and flesh out the plans after they return to their offices. Don’t bother to try this if you can’ t handle dialogue that reveals conflict or negotiate trade-offs persuasively— or if you’re the kind of insecure individual who gets his power from hoarding information. But if you’re up for it, this process will give you a reality-based budget that you can follow with confidence and adapt to changes in the business environment as they arise. Everyone will understand how they fit into the overall business. You’ll find that people will be able to move faster and will be more willing to experiment with good ideas, knowing they aren’t trapped in a rigid and probably obsolete budget structure. You’ll also find it’s a powerful team-building exercise. 233