My budget is too big

By Markovitz Consulting via us12.campaign-archive2.com   Article

When Less is More

“Shortly after joining Target as the company’s new CIO, Mike McNamara told his boss that his budget was too big:

‘We were just doing too many things. I mean we had over 800 projects. Even a company as big as Target doesn’t have 800 priorities.’

I’ve often written about the problems with individual attempts to multitask. In her book, The Outstanding Organization, Karen Martin wrote extensively about the corporate analog—how the lack of organizational focus leads to lousy outcomes, including frustration, inefficient allocation of resources, and poor customer service. (See Tony Rizzo’s bead game for an elegant simulation of this problem.) The fact is that both humans and organizations have a limited ability to do multiple things at once.

But it’s not just ongoing operations that fall victim to the lack of focus. Continuous improvement efforts often make the same mistake. In the rush to improve, and under pressure from leadership, internal kaizen promotion offices and external consultants often cram multiple initiatives and kaizen events into the project pipe in the hopes of realizing rapid benefits in SQCDM (safety/quality/cost/delivery/morale). But the result of too many projects is that very few ever get done well, and none get finished in a timely fashion. Little’s Law applies to corporate initiatives, not just customers in a Starbucks queue.

Hoshin kanri/strategy deployment is a well-established way to ensure that you don’t get 800 projects on the board in the first place. But if your organization doesn’t do strategy deployment, you can at least begin by seeing how well your projects align with the larger strategic priorities. That’s what McNamara did at Target: he convened a meeting of the company’s top executives, weighed each project against their strategic priorities for growth, and cut the list from 800 projects to 80.

The result is faster execution and better concentration of resources on the important few, rather than the trivial many.

Sometimes less is more.”

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