The 80% Solution
Time and again, as we discuss projects that clients have asked us to help them accomplish, we hear that nothing can ever change, and the client cannot possibly do anything differently, because:
- IT won’t support us,
- Accounting cannot change the chart of accounts,
- Payables cannot contact customers in a different way,
- Receivables cannot identify customers in a different fashion,
- we will lose all our business,
- and, in international projects,
- because whatever we want to do (streamline, simplify, automate) is impossible in Russia, or Cypress, or Turkey
Sounding familiar? We have actually seen client situations in which the client tells us:” we know we are a dinosaur, but we cannot figure out how to change.” This sort of organizational gridlock can be paralyzing, and defeating. So how to break through?
Our advice: try the 80% solution. That is, if we can figure out a way to accomplish 80% of the goal, let’s go for it and the remaining 20% (in our experience) usually takes care of itself, because once you are 80% of the way there, people are energized, onboard, and able to craft the solutions necessary to address the gaps. And if 80% is too high a bar, shoot lower, but use the success at the lower percentage to drive the project to a higher level of completeness.
For example: in an international banking/treasury consolidation, regionalize the requirements. Do NOT try to find one global solution, as nice as that sounds. There are too many differences within the context of international treasury for that to work. But DO identify a way to put (as an example) 60-75% of your countries on a similar platform. Leave the difficult ones out for now: they are likely to be small anyway. Identify areas where a critical mass of entities can move to a standard platform, process, or provider. Then, as a second step, address the gaps and ways to fill them expediently.
Phase each project realistically. Most of the team who will need to accomplish the change also are busy running the company. Do not let change stand aside, but create a realistic timeline (multi-year usually makes the most sense) and stick to it. Identify lots of milestones along the way to celebrate, and at some point, our experience is that when benefits are flowing, the team itself will want to accelerate the progress.
Finally, parsing the solution into the 80%, 60% or other fraction is a valuable step that will allow detailed analysis and thoughtful consideration of the parts that will make up the whole solution. It will allow the identification of the real requirements for IT (not the imagined ones) and afford the opportunity to size the business at risk to avoid and manage negative customer impacts.
Getting stuck on the 100% solution can be an obstacle to great improvements, process change, and cost savings. Don’t let it stop you!