Simplify and Zero Up

written by Bill Canady | Management Practices

September 21, 2023

The single most powerful tool in the 80/20 toolkit is simplification. The legendary management guru Peter Drucker may well be the most revered authority on simplification in business, but I prefer to go back to a much earlier source: Henry David Thoreau.

Henry David Thoreau

He was born in Concord, Massachusetts, in 1817 and died there forty-four years later. As a youngster, he had good business prospects. His father owned a prosperous and innovative pencil-making business and gave young Henry a good job in the factory, setting him up to take over the business when the time was right. Instead, he became a writer on subjects of nature, the environment, philosophy, and politics. He did build himself a small house—today, it would be called a “tiny house”— on land his friend and mentor Ralph Waldo Emerson gave him in a second-growth forest on the shore of Walden Pond, Massachusetts, and moved into it on July 4, 1845. There he wrote two books and made notes for a third, Walden, which was published in 1854 and was read by just about no one. Around a century after he died, however, Walden became so widely read and admired that the twentieth-century poet Robert Frost called it the “one book [that] surpasses everything we have had in America.”

Walden is rich in ideas, but if you want one takeaway to take away, take this: “Simplicity, simplicity, simplicity! I say, let your affairs be as two or three, and not a hundred or a thousand; instead of a million count half a dozen, and keep your accounts on your thumb nail. … Simplify, simplify. Instead of three meals a day, if it be necessary eat but one; instead of a hundred dishes, five; and reduce other things in proportion.”

Wouldn’t it be just awful if all your customers were like Thoreau? You’d be out of business tomorrow. And that’s an optimistic estimate. But I would love him as a member of my leadership team.

Thoreau said he wanted “to front only the essential facts of life” because he believed that our lives are “frittered away by detail.” As a CEO, executive, manager, or business owner, I bet you’ve said amen to that sentiment more than a few times a day. I know I have. I’ve sometimes found myself wishing I could just start over with a clean sheet of paper or a blank computer screen.

Well, I do it all the time—at least in my mind. I start over without all those unwanted and unproductive details that force us to fritter away so much of our time. In my mind, I discard the trivial many to focus on the vital few. All it takes is asking this question: What if the only customers I had were the 20 percent who generate 80 percent of my company’s revenue? In other words, I imagine that my only customers are A customers.

My first step is to identify my very best people, my top performers, and fire everybody else. Even though this is all done in my mind, it is not as easy as it sounds. I always have a good idea of who my top performers are in my actual (not imaginary) company. But that company does not serve only the top 20 percent its customers. So, all I really know is what it takes to serve 100 percent of my customers. I don’t know from experience what it takes to serve a company in which the 20 percent who produce 80 percent of its margin are the only customers. So, in this exercise of imagination, I make an educated but imaginative guess about what it takes to be an A player capable of serving nothing but A customers. And I must play this guessing game for every role in the company.

Turns out, I can guess pretty well. But one problem remains. I don’t really want to reduce my customer base by 80 percent. Do you?

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Bill Canady
Bill Canady has over 30 years of experience as a global business executive in a variety of industries and markets focused on industrial and consumer products and services.

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