7 Levels Of Change (Part 5 of 9) - Level 4: Cutting
Table of contents for 7 Levels Of Change
- The 7 Levels Of Change - Introduction (Part 1 of 9)
- 7 Levels Of Change (Part 2 of 9) - Level 1: Effectiveness
- 7 Levels Of Change (Part 3 of 9) - Level 2: Efficiency
- 7 Levels Of Change (Part 4 of 9) - Level 3: Improving
- 7 Levels Of Change (Part 5 of 9) - Level 4: Cutting
- 7 Levels Of Change (Part 6 of 9) - Level 5: Copying
- 7 Levels Of Change (Part 7 of 9) - Level 6: Doing Things No One Else Is Doing
- 7 Levels Of Change (Part 8 of 9) - Level 7: Doing Things That Can’t Be Done
- 7 Levels Of Change (Part 9 of 9) - Bringing It All Together
The fifth in a nine-part series on Rolf Smith’s 7 Levels of Change, I introduce the fourth level of change - Cutting (Doing Away With Things).
Part 2 - Level 1: Effectiveness
In Level 3 we introduced the concept of improvement, differentiated from efficiency and effectiveness, and discussed the tools and thinking needed to accomplish it. Together, Levels 1-3 encompass most of what the business world considers “continuous improvement” and is embodied in disciplines like Lean Six Sigma and Kaizen. As I have discussed before, these types of innovation benefit from accepted systems and training/certification programs.
As time goes on, however, the world changes again and you might find yourself at a point where some of your Level 1-3 innovations are no longer needed. Perhaps technology has rendered a process obsolete, or things have been added to your processes that are of limited value. In order to innovate further it’s time to do away with what is no longer needed, which brings us to Level 4 change - cutting.
The transition from Level 3 to Level 4 may induce discomfort, especially amongst KAI adapters, because doing away with things is often painful. It invokes a more severe form of change that moves adapters further out of their comfort zone and into the realm of KAI innovators, who welcome cutting as the first step to transformational change.
Thinking
To get less results, you have to stop doing things. To stop doing things, you have to practice refocused thinking. You need to start asking, “Why are we doing this now? What purpose does it serve? Is it worth it?”
Fortunately for us there is a simple principle which guides refocused thinking at the strategic level. It is the Pareto Principle - the Eighty-Twenty Rule. The Pareto Principle forces us to maximize our efforts on the things that produce the most value, and de-emphasize the rest. For us, the Pareto Principle simply states: “Eighty percent of the value your organization produces comes from 20 percent of the things you do.” So to implement the Pareto Principle, we identify what the “20″ is, and find ways to eliminate or outsource the “80.”
Doblin uses the example of Sara Lee, who, in a Pareto Principle examination of their core competencies, determined their “20″ consisted of consumer insight, brand management, marketing and distribution. Part of their “80″ was manufacturing, which they decided to outsource.
So what happens when you are left with things in the “80″ that can’t be outsourced or eliminated? Reduce effort to accomplish them. If the things in the “20″ are most important, give them your A+ effort. Stuff relegated to the “80″ warrant no more than a B+ effort.
Who
Level 4 change is decidedly “midrange.” People attracted to Level 4 change have KAIs clustering around either side of the mean of 96 and Myers-Briggs types xSxP. Pareto thinking is especially hard for high adapters, for which the process of eliminating significant parts of the box is especially painful - and some may have a hard time with the concept of “B+ effort.” It may not be as hard for high innovators, but it is not really that interesting, as they are more focused on blowing up the box and starting from scratch.
Ideas
Level 4 ideas are generated from an exhaustive refocusing effort beginning with a Pareto analysis. From there you can refocus on cost reduction end elimination opportunities for the “80.” The results of a Pareto exercise are maximized effectiveness in the most important areas (the “20″) and costs reduced by elimination in the least important ones (the “80″).
Tools
To cut, you need to be able to refocus on a lot of areas. A cutting exercise leaves no stone unturned. Level 4 tools help you diverge across multiple areas to identify opportunities, then converge on the ones that have the most promise for effective results.
- Sixty Words For Lowering Costs - Much like SCAMPER, this is a systematic menu of ways to rethink the aspects of your processes and procedures.
- “If It’s Dumb, It’s Not Our Policy” - Ask two questions: “What are we doing that’s dumb?” and “What could we stop doing that no one would notice?” If you get really adventuresome, send people out to “red-tag” things that are dumb, as a divergent step to target potential things to eliminate.
- Leverage Technology - with the electronic tools at our disposal we have myriad opportunity to do away with hard copies of documents, drawings, reports, etc. Move to Adobe Acrobat or whatever to eliminate the cost of duplication and printing.
When you eliminate big chunks of things by cutting, you leave holes and gaps. To enter the world of “doing different” you can start by filling those gaps by moving to Level 5 - Copying.
Social Bookmarks:
Comments
4 Responses to “7 Levels Of Change (Part 5 of 9) - Level 4: Cutting”
Leave a Reply
[...] Posts EEStor, A123, Altairnano…AND THE WINNER IS…7 Levels Of Change (Part 5 of 9) - Level 4: CuttingIC’s Familiar Quotations on InnovationElectric Motorcycle PrototypeThe 7 Levels Of Change - [...]
[...] Part 5 - Level 4: Cutting [...]
[...] out the stuff that’s not necessary and focus on the stuff that really matters (that’s a Level 4 change for those paying [...]
[...] Part 5 - Level 4: Cutting [...]