## Jun 19

### Listen to Your Team – The Toothpaste Box Parable

As CFOs, we often get very comfortable in our offices with our spreadsheets and data and forget what a valuable resource we have in our operations people.  When dealing with issues, how many of us think first to get out of our chairs and into the warehouse to talk to the “boots on the ground”?  If you’re like many CFOs, then you probably only take this step once you’ve spent a great deal of time poring over all the available data and determine that the answer lies elsewhere. The first step is to listen to your team!

## Think Outside the (Toothpaste) Box!

Consider the following parable…

### The Problem

A toothpaste factory had a problem. They sometimes shipped empty boxes without the tube inside. This challenged their perceived quality with the buyers and distributors. Understanding how important the relationship with them was, the CEO of the company assembled his top people. They decided to hire an external engineering company to solve their empty boxes problem. The project followed the usual process: budget and project sponsor allocated, RFP, and third-parties selected. Six months (and \$8 million) later they had a fantastic solution – on time, on budget, and high quality. Everyone in the project was pleased.

### The Solution

They solved the problem by using a high-tech precision scale that would sound a bell and flash lights whenever a toothpaste box weighed less than it should. The line would stop, someone would walk over, remove the defective box, and then press another button to re-start the line. As a result of the new package monitoring process, no empty boxes were being shipped out of the factory.

### Results

With no more customer complaints, the CEO felt the \$8 million was well spent. He then reviewed the line statistics report and discovered the number of empty boxes picked up by the scale in the first week was consistent with projections, however, the next three weeks were zero! The estimated rate should have been at least a dozen boxes a day. He had the engineers check the equipment, they verified the report as accurate.

Puzzled, the CEO traveled down to the factory, viewed the part of the line where the precision scale was installed, and observed just ahead of the new \$8 million dollar solution sat a \$20 desk fan blowing the empty boxes off the belt and into a bin. He asked the line supervisor what that was about.

“Oh, that,” the supervisor replied, “Bert, the kid from maintenance, put it there because he was tired of walking over, removing the box and re-starting the line every time the bell rang.”

## Conclusion: Listen To Your Team

As CFOs we have two takeaways from this story.

#1 Don’t overthink the problem,

#2 Get your team involved because they have the solution to the problem.