Alex asked a question “How do organizations determine the ‘vital few’? Any small number of activities that have the largest impact in relation to business planning, launching an TPS implementation project or simply getting through a day productively are known as the vital few. A good test of the vital few is that they should answer “How do we do more with less?” During tough economic times when many of us are squeezed for resources this question becomes more important than ever. Focusing on the vital few is a good strategy, but how do we arrive at the vital few?
Follow the 80-20 Rule
The late Dr. Joseph Juran brought the age-old bit of wisdom about “the vital few and the trivial many” into the consciousness of the business community in general through his work in the field of quality. A popularized application of this has been the Pareto principle first formulated by Italian economist Vilfredo Pareto. It is also known as the 80-20 rule because of this rule holds that:
- 80% of your sales come from 20% of your product offerings
- 80% of your results will come from 20% of your actions
- 80% of customer complaints come from 20% of observed problems
- 80% of all decisions are made during 20% of all meetings
- 80% of the information you file away is never retrieved again while 20% is
We could say that the entire premise of lean manufacturing is in fact an application of Pareto’s law: 80% or more of what we do is waste while 20% or less adds value. However instead of focusing on improving the “vital few” 20% we focus on getting rid of the other 80%. This is a very important distinction. Focusing on the vital few does not mean that more resources are needed for your top priorities, only that less attention and resources should be spent on the trivial many. This is hard for many to accept, especially when their work is classified as being part of the trivial many. Many change efforts falter when there is inadequate communication and change management activity with stakeholders whose importance is diminished due to the new focus by the organization on the vital few. Often the reaction is to dig in and defend the trivial many initiatives. A times like these we need to be reminded who we serve.
Ask the Customer
One strategy for arriving at the vital few is to do more of the things that you do well and that help you succeed. Regardless of how high of an opinion we hold of ourselves, it is humbling to realize that the customer rules 80% of our success. Of the remaining 20%, a further 80% of our success is reliant on our team members and our support. Personal effort may be no more than 4% of the reason for our success. In order to enlist our customers’ help, first apply the 80-20 rule to identify the top customers, top products and then the reasons they choose you or your firm. Then identify an experiment to determine whether doing more of this type of work for similar customers will increase how successful you are. This can help you identify the customer voice elements of the vital few.
Use Hoshin Kanri
The management planning and direction-setting process known as hoshin kanri in Japanese or policy deployment in Englih uses a variety of strategy development tools and techniques to ultimately arrive at between 3 to 5 annual objectives. These objectives need to be significant objectives and not merely extensions of the budget numbers from last year. They should be stretch goals that require behavior change, challenge and cross-functional teamwork. The reason to have 3 and not just one is to maintain a certain balance between internal (financial performance) and external (customer) targets, as well as between qualitative and quantitative goals, business objectives and objectives in terms of people development to enable future business objectives. The balanced scorecard goes hand in hand with hoshin kanri, and when it is well-designed can assist in selection of the vital few by identifying the metrics that are lagging and most urgently needing improvement. Hoshin kanri is in fact nothing more than a turning of the PDCA cycle but at the level of business planning.
Turn the PDCA Cycle
Regardless of the approaches you follow to arrive at your personal or corporate vital few, it is essential to turn the PDCA wheel. Without learning, action is nothing as even if the results are positive you cannot be sure if it was luck or your efforts that led to success. Only by repeatedly testing your hypotheses can you arrive at the correct conclusion. The selection of the vital few (the Plan) may be incorrect or may need to be adjusted and this we can only learn through Do, Check and Act. No plan goes according to plan. When things don’t go according to plan, we need to go back to the plan and try something else until we hit upon the vital few.
The Harvard University Professor and international expert on competitive strategy Michael Porter said, “The essence of strategy is choosing what not to do.” In a sense identifying the vital few is an instance of success through subtraction. As a practical exercise, try these things depending on the scope of your “vital few” activity:
Limit yourself to only one personal objective right now. What is the one thing that you want to accomplish that will have the single biggest impact on your happiness? Ask yourself, “If I had a magic wand that could grant one wish, what would it be?” Then ask “Why?” to verify that you are not reaching at the branches but at the roots of the objective. If the answers to these questions are clear, go for it, provided it does no harm to others. This is one way to arrive at a vital few objective.
Limit yourself a goal to accomplishing only three daily tasks towards your objective, per day. Write them down on a white board or on a piece of paper. Tell others what these three things are so that you make a public commitment to them. Often others will give unexpected assistance when they know what is important to you. Then do these three things. Once they are done, you have the freedom to address other needs or take on other tasks as they arise. If you only get one or two of these three things done on some days, reflect at the end of the day why that was. Were the three tasks too large for one day? Was it an abnormal day with many interruptions? As long as we learn and adjust plan for the next day, it is okay to fail on some days.
Limit your personal, family or organization annual objectives to no more than 5 significant initiatives for the entire year. The same discipline to focus on fewer things applies in hoshin kanri as in daily life.
Sort, Set in Order, Sweep
Identifying the vital few is like a 5S of the mind. Sort out needed from not needed, set things in the right order or priority and periodically sweep away the inessentials and junk that gets in. Clarity of purpose and vision is important. As in the workplace, the more you know what “good” looks like the easier it will be to notice when things are abnormal. the same is true of strategies. You can’t get what you want until you know what you want, and you can’t want too much at once. Author and teacher of 7 habits Stephen Covey said, “The key is not to prioritize what’s on your schedule, but to schedule your priorities.” Work on the vital few rather than searching, moving and choosing among the trivial many. The 5S of the mind is more difficult because it is less visible but far more important in how we choose to live.
What have you found effective in helping you arrive at the vital few?