Clear the Political deck.

1. Clear the Political deck. • Promoting a world class outlook means educating people company wide to speak a new language. • Make sure it is intelligible to more than just the accounting types.otherwise ABM would like another way to control the company. • On the other hand,if the co. hands over ABM exclusively to operational people management,finance people are likely to fight implementation.Either way ABM fails. • Creating a cross functional senior Management and project teams is the way to drive a political ABM.

2. Demonstrate rather than dictate. • Persuade people that ABM is more than just another management theory.Launch • A pilot with enterprise wide implication. • A CFO of a large consumer durable products division did just that,when management was faced with two costly options to reinforce washing machine for the instituional cleaning market. • Hand picking th project that fanned across the division,gathering information and opinions from every one involved in the process,the CFO gradually taught managers about ABM how activities are isolated,and cost drivers derived.But they still needed convincing on how it could solve dilemma.

3. With the pilot up and running on a computer,the CFO ran what if analyses. • Option I using special bars,required different suppliers,special tooling,set up and manufacturing operations-result higher component costs would raise product price by an intolerable 30% at the low end of the market.ABM ruled this out. • No positive impact on the bottom line. • Option II using different metal for standard bars,required overhauling the manufacturing process.a more complex operation which would again raise the price.But ABM showed that incremental cost of configuring the factory was offset by production time savings. • Confident that option II would marginally improve picture in the short run but have major impact in the long term,mangers returned to their units extolling the virtues of ABM.