Do you have a “to do” list? Yes… That’s great. But do you also have a “stop doing” list?
Most of us lead busy but undisciplined lives. We have ever-expanding “to do” lists, trying to build momentum by doing, doing, doing—and doing more. And it rarely works as it distracts your focus from your long-term goal. Your energy is scattered in small tiny goals of a “to do” list. Those who built the good-to-great companies, however, made as much use of “stop doing” lists as “to do” lists. They displayed a remarkable discipline to unplug all sorts of unimportant junk.
When Darwin Smith became CEO of Kimberly-Clark, he made great use of “stop doing” lists.
Kimberly-Clark Corporation is an American multinational personal care corporation that produces mostly paper-based consumer products. The company manufactures sanitary paper products and surgical & medical instruments.
Kimberly-Clark brand name products include Kleenex facial tissue, Kotex feminine hygiene products, Cottonelle, Scott and Andrex toilet paper, Wypall utility wipes, KimWipes scientific cleaning wipes, and Huggies disposable diapers and baby wipes. Kimberly-Clark and its trusted brands are an indispensable part of life for people in more than 175 countries.
Founded in Neenah, Wisconsin, in 1872 and based in the Las Colinas section of Irving, Texas since 1985, the company operated its own paper mills around the world for decades but closed the last of those in 2012. With recent annual revenues topping $18 billion per year, Kimberly-Clark is regularly listed among the Fortune 500.
Darwin Smith saw that playing the annual forecast game with Wall Street focused people too much on the short term, so he just stopped doing it. “On balance, I see no net advantage to our stockholders when we annually forecast future earnings,” said Smith. “We will not do it.” He saw “title creep” as a sign of class-consciousness and bureaucratic layering, so he simply removed titles. No one at the company would have a title unless it was for a position where the outside world demanded a title.
He saw increasing layers as the natural result of empire building. So he simply unplugged a huge stack of layers with a simple elegant mechanism: If you couldn’t justify to your peers the need for at least fifteen people reporting to you to fulfill your responsibilities, then you would have zero people reporting to you. (Keep in mind that he did this in the 1970s, long before it became fashionable.) To reinforce the idea that Kimberly-Clark should begin thinking of itself as a consumer company, not a paper company, he unplugged Kimberly from all paper industry trade associations.
Change in Budgeting Concept
The good-to-great companies institutionalized the discipline of “stop doing” through the use of a unique budget mechanism. Stop and think for a moment: What is the purpose of budgeting? Most answer that budgeting exists to decide how much to apportion to each activity, or to manage costs, or both. From a good-to-great perspective, both of these answers are wrong.
In a good-to-great transformation, budgeting is a discipline to decide which areas should be fully funded and which should not be funded at all. In other words, the budget process is not about figuring out how much each activity gets, but about determining which activities best support the Hedgehog Concept(#) and should be fully strengthened and which should be eliminated entirely.
Kimberly-Clark didn’t just reallocate resources from the paper business to the consumer business. It completely eliminated the paper business, sold the mills, and invested all the money into the emerging consumer business.
If you look back on the good-to-great companies, they displayed remarkable courage to channel their resources into only one or a few areas.
Brief About Hedgehog Concept (#)
Hedgehog Concept says that it’s better to focus on doing one thing well than to spread your efforts between a range of things. It follows that organizations should focus on something they are good at, passionate about, and which is profitable. More precisely, a Hedgehog Concept is a simple, crystalline concept that flows from a deep understanding of the following three key points:
- What you can be the best in the world at (and, equally important, what you cannot be the best in the world at). This discerning standard goes far beyond core competence. Just because you possess a core competence doesn’t necessarily mean you can be the best in the world at it. Conversely, what you can be the best at might not even be something in which you are currently engaged. That can be totally a different business portfolio.
- What drives your economic engine. All the good-to-great companies attained piercing insight into how to most effectively generate sustained and robust cash flow and profitability. In particular, they discovered the single denominator—profit per x—that had the greatest impact on their economics. (It would be cash flow per x in the social sector.)
- What you are deeply passionate about. The good-to-great companies focused on those activities that ignited their passion. The idea here is not to stimulate passion but to discover what makes you passionate. Passion is one of the prominent factors for extraordinary and consistent performance.
I have seen in my corporate life, that the biggest challenge for a leader is to bring any change in the organization. Many people in leadership roles just wish to continue the routine activities. Only a few dare to change and make their “stop doing” list for the benefit of the organization.
Actually, people hate changes, they only want to follow the routine. “If it ain’t broke, don’t fix it,” they say. Psychologically speaking, it’s not just that people fear change, (although they absolutely do) It’s also that they genuinely believe what they’ve been doing, and how they’ve been doing it, is the best possible way to do it. And the longer they’ve been doing it this way, the better, more efficient, more economical, etc.
But during the course of time, such an organization’s performance becomes stagnant. If they are not changing according to the latest development of their product or service areas, then they are probably heading towards disaster. Doing such period “stop doing” list is very essential.
For a leader, to initiate any change, which is in favor of the organization, a smooth execution strategy is needed. This strategy goes like the inclusion of new ideas, concepts & processes, and at the same time the removal of obsolete, non-efficient, non-profitable processes. It all starts with careful planning, transparency with the team about the need for changes, proper communication, creating a roadmap, providing training, inviting participation & a proper feedback system of monitoring and measurement of those changes.
Any change took time, so have patience and be ready not to get the desired result at a very early stage. If such things happen, then make necessary changes in your execution strategy but never drop the idea of change if it is beneficial to the organization.
“To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.” – Steve Jobs