The Secret of Success is Simple Put the 80/20 Rule to Work for You
By: John Shepler
We wax nostalgic over the simple life. It's that wonderful
way of living enjoyed by other people at another time. Our parents
had a simpler world to contend with. So did Grandpa. Just ask
Mom and Dad. They'll tell you life was simpler in days gone by,
the days of their grandparents. Life was less hectic then, less
stressful. Why? Well, things were less complex. How about work?
Definitely less complex, less stressful. Grandpa isn't so sure,
but he is certain Great-grandpa had a simpler life. How will
things be in the future? Everyone seems to agree it will be more
and more complex, more and more stressful. It seems hard to believe
that people will be able to cope.
In
that case, why not shuck the whole business and get back to something
more reasonable? That's an attractive notion, but most of us
dismiss it pretty quickly as fanciful thinking. After all, the
world is now being driven by technology, and everyone knows that
technology just makes things more complicated. It's too late
for the simple life now. We have computers!
Dan Dooley isn't buying into any of this. He's a management
consultant with some simple ideas on how to improve business
processes by 50% or more without adding any new big, fancy computer
systems. What's his secret formula for bailing out floundering
companies and supercharging profitable ones? You might say it
is simplicity itself.
Dan has an approach that's as appealing as baseball, apple
pie and the Fourth of July. It's called USA. In this case, USA
is an easy way to remember the process. Understand, Simplify,
Automate. Sounds easy enough, but there is a trick to it. It's
in the weighting we give each of those three elements. You need
to put the most time and energy into understanding the situation,
then spend a reasonable time figuring out clever ways to simplify
things. Only after you've wrung out as much complexity from the
system as you can, do you dare automate.
What's the most appealing way to solve a problem? Buy a system,
and the more different things it does the better. We have a sense
that the computer system will tie up the loose ends, make work
flow faster than any human can possibly move and give us that
clean, simple world we're hungering for.
What typically happens is that computers put a high-tech gloss
on a rotting foundation. The cosmetic improvements can't hide
the fact that the inherent process is sluggish, error prone and
in need of constant care and feeding. A symptom of this is having
to expedite everything around the real system to get results
in a reasonable time. Another sign to watch for is any activity
that generates tons of reports that people don't miss when they
are late or disappear completely.
What's a better way? Well, the first thing you need to do
is get an in-depth understanding of the process as it is now.
This should take 80% of your time for the project. What? Yes,
80%. No less. What you'll be doing is collecting hard data and
analyzing it. No guesswork or estimates are allowed. You need
to draw a map of where each piece of paper goes, check how long
it takes to get from place to place, watch it sit idly in in-baskets,
and then find out how much time is really spent in the processing
actions.
If you're not sure what to do, take Dan's advice and "staple
yourself to an order." In other words, pick a customer order
or some internal requisition and personally walk it through the
system. Carefully record what happens at each step and how long
it takes. When you draw this all out on large sheets of butcher
paper with a felt-tipped pen, you may be amazed at what you'll
find. Don't be surprised if the process is so complex that the
pattern looks like a spider web on paper. Also don't be flabbergasted
if you find that the order you stapled yourself to spends 80
to 90% of its time waiting to be worked on or getting fixed from
some mistake.
So are you flabbergasted? I certainly was. Now I'm starting
to see where even processes that actually get things done have
room for a 50% reduction in time, variations or number of steps.
You'll need to gather the numbers for your own project to really
see where the opportunities are.
Oh, yes, even the process of simplifying can be simplified.
Another amazing rule of business, or really any activity, is
that 80% of the benefit is coming from 20% of the time and expense.
The last 20% is eating up 80% for not much gain. This implies
that you may want to establish a couple of different processes,
each optimized for a particular type of customer or activity.
The one-size-fits-all approach may actually be more complex in
order to handle all the special cases.
So is simplicity getting complicated? Well, it may take some
getting used to before we're able to think in terms of subtracting
instead of adding more and more and more to our methodologies.
There are juicy rewards though. If you can really simplify what
you do and combine steps, get rid of reports, etc., you'll "discover"
extra staff that can be used for all those interesting projects
that nobody has time for now. Who knows, you might even rediscover
the simple life.
Note:Daniel F. Dooley is a consultant
specializing in general management and financial management.
His title is "Agent of Change." You can contact Dan
at 2112 Neff Court, Lisle, IL 60532, or call 603-369-2717
Also visit these related sites:
Pareto Principle - Named after economist Vilfredo Pareto, this is the origin of the famous 80/20 rule.
Telexplainer - Network and cloud
technologies explained in simple terms.
Vintage Watch Gear Mechanism Collection - Brass casting image of a vintage pocket watch mechanism including gears, screws and other small components. Has that steampunk look.
