Why is it so hard to let go? Why is it so easy to just keep doing, doing, doing … even if it isn’t producing the outcomes we desire? Are we afraid of being called a quitter? To be truly effective leaders we need to concentrate on the vital few not the meaningless many.
According to research reported in the Harvard Business Review article, “Beware the Busy Manager” only 10 percent of managers apply sufficient effort to the vital few activities that produce game changing results. Forty percent of managers spent all their energy on the wrong activities (distracted managers), 20 percent spent very little energy on the right activities (disengaged) and 30 percent were procrastinators spending almost no energy on much of anything.
Harvard’s research once again supports the 80/20 Pareto Principle, that 80 percent of your results come from 20 percent of your activities. In his landmark book, “Good to Great,” Jim Collins reminds us that “Stopdoing lists are more important that todo lists.” Michael Porter, the grandfather of Western Strategic Thinking, cautions CEOs, “The essence of strategy is deciding what not to do.” And yet, our managers seem to get busier and busier, not more and more effective.
So, why can’t we just let go of bad customers, obsolete products and failing processes? I think it starts with mindset. Do we have a plow horse mentality or a race horse mentality? A plow horse mindset is the most primitive and least effective response to problem solving. A plow horse, when confronted with setbacks and declining results, says, “I’ll just work harder.” A race horse mentality is focused on winning the race. Race horse executives are laser focused on opportunities not problems. They prioritize the future over the past. They concern themselves with their vision not with what the competition is doing and they aim for game changing results versus continuing the status quo. A race horse mentality says, “How can I run faster?” not “How can a race horse do more?”
Plow horse executives predict the goals they can achieve based on historically slow and ineffective past experiences littered with missed targets and recurring problems that never seem to get resolved. As a result, they set low, uninspiring targets and fail to achieve them. Race horse executives set dramatic, Big Hairy Audacious goals that demand the very best of people to achieve them. But interestingly, they don’t set an unreasonable pace or overtask their people. Instead, they make room for people to innovate their way to success by abandoning low value efforts.
The art of abandonment starts with a couple uncomfortable questions.
- If I wasn’t already in this line of business (or customer segment, or product line), would I start it today?
- Knowing what I know now about my previous decision to do “X,” would I still do it?
- Armed with my new answer, what shall I do about it?
To free up your organization to focus on the vital few we need to prune our business models. What would happen if once a month your leadership team held an abandonment meeting? Once a month you could ask a different question:
- Which customers should we abandon?
- Which vendors should we drop?
- Which processes are obsolete?
- Which reports are not being used?
I have the honor of working with Dr. Rajiv Tandon. He leads our fast-growth CEO peer group. Rajiv built a company focused on this 80/20 approach. He determined that if he produced a service that delivered 80 percent of the benefits of the competition he could do it with perhaps only 20 percent of the effort required of a 100 percent solution. Then he focused on customers who only needed 80 percent of the benefits. (Do you use all the capabilities of your phone or computer? Can you imagine how cheap a product or service could be if it provided only the things you value?)
The end of the story is that Rajiv’s company grew to a $100 million run rate in only nine years. Along the way, his team concentrated their efforts on innovations that produced significant results and quickly abandoned any horse that couldn’t finish the race. Again, deciding what not to do became as critical as deciding what to do.
Kenny Rogers had it right, you have to know when to fold ’em, know when to walk away and know when to run. When we master the art of abandonment, we give ourselves the gift of focus and the satisfaction of market beating results.