Excerpt From Book -Intoduction – By Ron Pestone
The job costing method in this book ELM which is an acronym that stands for Equipment, Labor and Material. ELM’s mantra says it all, KNOWING IS EVERYTHING. The following story best illustrates just how important knowing is.
In upper New York State, there was a small privately held electrical utility company that was run by an old time electrical engineer. For many years the company provided quality electrical power at very reasonable rates, while always generating a handsome profit. As its principal owners aged a decision was made to sell the company and to move to a warmer climate. A large conglomerate purchased the company and after a brief time sent in a small army of engineers to evaluate each component of the plant and to assume the responsibility of running the plant. As a consequence, the old time electrical engineer was unceremoniously let go. For some time, the plant ran smoothly and then one day for reasons unknown it stopped running. All the electrical engineers who had been hired to run the plant worked day and night to get the plant running again all to no avail. Additional experts were bought in and no matter what anybody tried, no one could get the plant running again. Customers were complaining and the local newspaper blasted the management of the plant with giant headlines. Unable to resolve the problem and faced with mounting criticism and the possibility of a hearing before the power authority, the president of the conglomerate asked, “What about the old man who had been running the plant for years, maybe he knows something?”
They searched out the old man who had retired to a little fishing cottage in Maine and he agreed to come in to fix the problem for a fee. When he arrived at the plant he was surrounded by all the bright young engineers who had been hired to replace him as well as top management. As he started to walk through the plant with this group he asked someone get him a small sledge hammer.
When he reached the bowels of the plant he took the small sledge hammer, and to everyone’s astonishment walked over to a large valve and gave it a hard whack. Miraculously the plant started running again. The old time electrical engineer smiled and quietly left. Two weeks later the president of the conglomerate received a bill for two million and two dollars from the old time electrical engineer. Outraged he personally called the old time electrical engineer and asked him to explain his bill. The old time electrical engineer responded, “The two dollars was for the hit with the sledge hammer and the two million dollars was knowing where to hit.” As in many things in life, knowing is everything and that is that power ELM gives you. You will really know.
Don’t Forget: We Build America