It doesn’t seem that long ago that people were planning a memorial service for JC Penney. But things seem to be heading the right way after Marvin Ellison became CEO in August 2015. One of the things that Ellison brought over from Home Depot was the importance of simplifying things. At JC Penney, they call it “Project Simple.”
The goal of Project Simple is pretty, well, simple. Today JC Penney associates spend about 60 percent of their time doing things that don’t involve contact with customers. Those things include answering email and restocking shelves and opening shipment cartons. The idea is to change that so that 60 percent of the sales associate’s time is spent dealing with customers and only 40 percent on the back room activities.
That’s a good idea, and it leads us to the first principle of simplification.
Pick a specific, high-leverage target
At Penney, the idea is that if sales associates spend more time in contact with customers, they will do more selling. Penney sees that as a high-leverage activity.
If you’re going to simplify operations, pick a specific target for what you want as the result. Pick a leading indicator of a key performance measure. In most sales operations, increasing face-to-face selling time will result in increased sales with only a marginal increase in cost.
Go big or go home
You can usually simplify operations by taking things out. Don’t try to snip out little things from lots of places. You’ll get the best results if you take out big, important chunks.
Simplify complicated processes, not complex ones
Don’t try to simplify complexity by taking things out. A complex system is one where the parts are interdependent, and if you make a change in one, it affects everything else, so you have to make lots of other changes. If you take one out, the entire system fails.
Think about the air conditioning system in your car. There are lots of parts to that system, remove any one of them and you don’t have air conditioning anymore.
Complicated processes are different. You can remove things from a complicated system and it will still work. Sometimes it will work better, and sometimes it won’t. But your best chance of reducing work is to remove things from the complicated processes not the complex ones.
Are all those reports necessary?
In most organizations, the number of reports increases over time, like some inexorable force of nature. It happens when a new boss wants a special report from all his direct reports. But when the boss moves on to bigger things, the report stays behind.
When I was young (and foolish) I tested the utility of a report I suspected was useless by not sending it for a couple of cycles. When no one noticed, I sent a memo suggesting that since no one had missed the report, perhaps we should eliminate it.
In return I received a memo from a corporate Vice President. It was hand-delivered by his secretary. He derided what he called my “cavalier attitude toward the information needs of the company” and demanded that I have all my reports caught up by the end of the next day.
Even though that didn’t work out so well for me, I recommend evaluating every report to judge if it is necessary. You will be amazed how many you can eliminate.
Hunt down approval bottlenecks
The approval processes in many companies are artifacts of a paper-based, industrial age. Get rid of unnecessary approvals. Here’s an example.
I worked with a client years ago to shift much of their business processes from paper to digital. We wanted to start with the things that would make the most difference to front line people.
When we asked sales people what they most wanted to see improved, they nominated the approval of their expense reports. When we looked into it we understood why.
It sometimes took more than two months from the time an expense report was filled out and submitted to the time a paper check arrived in the sales rep’s mailbox. The biggest bottlenecks were four separate approvals, each requiring a sign-off on a paper form.
Sometimes, the person who had to approve the process was on vacation or on a business trip. When this happened, the expense reports wound up on the bottom of high-rise in boxes the more recent paper at the top. Sometimes the report got lost. Sometimes it was sent back for more supporting data.
By digitizing the process and removing three of the approvals, we reduced the time from an average of 46 days to four.
Design your process to make it easy for the good guys
Too many business processes seem like they’re designed to make sure that nobody puts anything over on the company. The fact is, most of the people who work for you won’t even try to cheat. They’ll try to do the right thing. Make it easy for them.
You can have auditors check up on things and catch the people who are abusing the system. Then deal with them accordingly. In the meantime, the good folks will be happier and more productive and you’ll be more profitable.
Simplification will not cure all ills
Simplification isn’t a magic cure-all. If you simplify the wrong things, there won’t be much impact on productivity. Cut too much and you can destroy efficiency in the name of saving it. Einstein was right: “Everything should be made as simple as possible and no simpler.”
So, find high-leverage activities where things like approvals make it hard for people to do good work. Then get rid of the offending process.
Simplicity is not a holy grail or a magic solution to all your problems. Simplification is a tool that you can use to make your business more productive.