The "Principles" of Activity Based Management

1. Manage the work, not the worker.
   Eliminating people does not eliminate the root cause of cost. ABM is founded on the principle that activities consume costs and products, services, and customers consume activities. The root causes of an activity are rarely under the control of the people who actually perform the activity.
2. Define the customer of your activity and process.
   Determine if customers are satisfied with the cost, quality, service level and response time of your output. Use ABM in concert with Total Quality Management, Business Process Reengineering, Benchmarking, and other tools to improve activities to meet customer's needs.
3. Attack the competition, not each other.
   Form cross-functional business process teams. Define process managers. Synchronize activities across functional boundaries to create simple, mistake proof, and flexible processes that meet customer needs.
4. Insanity is defined as performing last year’s activities using last year’s methods yet expecting improved results this year.
   Benchmark Value-Added activities with the best in the world, implement improvements, and celebrate the results.
5. It is more important to do the right thing than to do things right.
   Minimize or eliminate Non-Value Added wasteful activities. Re-deploy the resources to fund growth or improve profits.
6. Don’t kill the messenger of bad news.
   Celebrate finding errors and the root causes of activities. Do not celebrate the repetition of errors or variances to plan. Define and resolve the root causes of unnecessary activities, excessive costs and poor quality.
7. Coasting is always downhill.
   Continuous improvement of activities and processes is a step-by-step uphill journey to remain competitive. ABM is not a diet. ABM is an unending process of analyze, act, and account.
8. Eliminate unhealthy comparisons and outdated performance measures.
   Disregard indirect versus direct headcount statistics and other irrelevant measures. Manage activities, processes, output, and value, not the classification of employees.
9. Ask yourself annually "What's our business and how's business?" 
   Determine if your activities and performance support the mission statement of the organization. Define activity measures necessary to achieve the strategic plan and budget.
10. Employees want to do a good job.
    And they will do a good job, if they enjoy their job. Provide employees with the training and tools necessary to fill their job with 100% Value-Added activities.

ICMS, Inc.
PO Box 13206 Arlington, Texas  76094
Phone: 817-475-2945
E-mail: tompryor@icms.net