Over time, organisations, like human beings, tend to become blithe, lazy, and inefficient. Gaining unnecessary ‘weight’ by adding costs that are not always productive.
We are all susceptible to atrophy.
But as Peter Drucker noted, “In turbulent times the enterprise has to be kept lean and muscular, capable of taking strain but capable also of moving fast and availing itself of opportunity.”
And these indeed are turbulent times.
In our experience, there are few initiatives more effective than the pursuit of strategic abandonment.
On a personal note, every three months, I spend half-a-day going through all my personal possessions and split them up in three groups: the first – items that I still use and need to keep; the second – things that I no longer use and need to trash; and third – stuff that I’m unsure of – which I put in storage…if I don’t use it over the ensuing three months, I dispose of those items as well.
I also have an ongoing principle that if purchase something new, it must accompany the disposal of something redundant.
I do the same with areas of focus in my professional life. This habit has served me well in managing not just my possessions, but my pursuits, career, even relationships.
But whilst practicing this once a quarter has proven to be reasonably effective in the past, with the increasing pace of change, it may have to be done more frequently.
For we need to constantly seek to focus our time, energies and resources on results, otherwise distractions creep in and dilute our abilities.
The greatest price we will pay for doing anything is its opportunity cost!
A useful tool is the Stop/Start/More/Less framework.
Here we start by asking a very simple but powerful question: With the information we have today, if we weren’t already doing this, would we engage in such an activity?
A closely related and just as confronting question needs to be applied to our people. We we call this the car-park test. If we had to walk across the street and start from scratch who would we take with us? Would we employ all the people that work for us right now? Would they be in the same roles?
If the answer to any of these questions is NO, then we must strategically and fairly seek to abandon such activities and people.
Only if we stop doing certain things and free up our resources, can we effectively chase new opportunities.
Sometimes, of course, it’s about doing ‘less of’ or ‘more of’ certain things. Reducing the investment of resources and people on certain projects, or conversely increasing time and effort on others.
Now is as a good time as ever to run a ruler across everything in the organisation be they a product or service, a process, a department, capital investments, even suppliers and customers.
A mistake that many organisations make especially with their financial budgeting process is to take last year’s actuals and then simply forecast as best they can what the following year’s income and expenses are likely to be.
This is highly regressive and does not pay adequate attention to the changing environment – even if done rigorously.
We recommend two additional forecasts. An opportunities budget and a divestment budget
The former considers opportunities in the environment and seeks to employ the organisation’s comparative competence to pursue them.
Whilst a divestment budget puts on trial every activity with questions such as: Is this really necessary? Does the cost justify the results? Is there a better, more cost-effective, more efficient way to achieve the same outcome?
The rule here, as Drucker put it, is to “feed opportunities and starve problems”.
A strategic and systematic practice of abandonment will ensure organisations (and people) are lean and agile. It frees up time and resources – to pursue what lies ahead.
In our experience typical constraints to accomplishing this include tradition (we’ve always done it this way); routine and inertia (avoiding conflict and change); and familiarity (being too close to the problem or the people).
In such instances there are few better approaches than to have an external consultant facilitate the process. It ensures thoroughness, avoids conflicts of interest, and eliminates bias.