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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.

Gears TurningIn 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

 

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First Published: June 28, 1998 as part of A Positive Light