Many raindrops make an ocean. We have seen a divisional vice-president sneer at a small cost reduction and tell us it was not Six Sigma material. We didn’t care, because permitting small cost reductions makes the practice part of the culture while still adding benefits to the firm. We have already shown in another blog how quickly relatively small savings add up.

We would also note that popular personal finance advisors also recommend the “small but growing” approach to savings. The first step is always to get into the habit of saving money. We want that spare cash so we can continue to send our sales and marketing people out to drive business even when the market is terrible. This approach allows us to steal some marches on our competitors, sometimes leaping over them.

We think kaizen savings is the way to create a culture of intelligent spending. Of course, sometimes we will have to intervene in situations where people are being “penny-wise and pound-foolish.” We have seen this situation in an automotive wiring facility where the staff was cutting wire with poorly constructed hand wire cutters. A simple $4,000-$5,000 investment in an automatic cutter would ultimately save time and provide some level of repeatability. However, if we have been saving elsewhere, we will easily be able to afford this equipment.