Business life is now a constant 24x7 barrage of intense hyper-competition, mind boggling complexity, global corporate footprints, multinationalism et al.   Corporate evolution demands that we are relentlessly alert to resolving two simple dilemmas.  How to:

The Power of Five is a way of quickly identifying low hanging corporate ‘fruit’.  Once identified, it allows astute companies to focus their efforts, resources and time so as to get their biggest bang for their buck in the shortest period of time.

With a group of highly experienced subject matter experts (SME’s) focus attention on the top five biggest problems.  What we are looking for are high return-on-investment (ROI) problems that will be able to be resolved in the short to medium term, providing the biggest positive impact to the organization. 

This is normally accomplished by creating a spreadsheet on a whiteboard with the above mentioned elements.  Usually the identification of problems proves to be an almost effortless task as problems in any business are not in short supply.  (Please keep in mind that we are not looking at solutions to the problem – that will come later - nor are we only looking for problems that we think can be resolved.  Even the seemingly impossible is to be catalogued.

Let the SME’s brainstorm a list of all ideas, writing these down on the board.  Once this is done, obtain consensus for the remaining elements, such as: Can this problem be resolved in the short, medium or long term?  What will the impact be on the organization once this problem is resolved – high, medium or low?  What current pain is this problem causing the company – high, medium or low?  How much do you think it will cost to fix this problem – high, medium or low?

Before going through this exercise, first agree with the team what high, medium and low means.  So, for example, some companies have defined short term to mean between 1 and 4 months, medium term 5 to 9 months, and long term anything exceeding 10 months.

Once rated, the top five problems will usually be easily identified.  After recording the other problems, erase all but the top five from view.  In order to provide an easily understood visual, we translate the spreadsheet into a graphic – see Figure 1. 

Clearly a company would like to pursue high pain problems with a medium to low implementation / fix cost that can be realized over a short to medium term time frame.  Using Figure 1 as an example, the problem Costly Raw Materials seems to be an obvious candidate to pursue, being: High pain, with a short term fix window, with positive high impact on the organization, that has a low estimated fix cost.

The next step to be performed is similar in nature to the first except this time, instead of brainstorming for business problems; we are going to be looking for the top five business processes that can be de-emphasized in future.

Yes, as strange as it may seem, organizations frequently do things when they ought not or at least not as well or as often.

How is that possible?  If you had a complete list of all the business processes your organization performs, you would notice procedures that were once considered very important to the company – such as the ex-CEO’s pet project, or processes required when your ERP system was first implemented etc. – that either are no longer needed or at best not as frequently or to receive as much attention or focus as before.  While there are other methods to identify such processes, Step 2 is a much quicker method, albeit not as complete.

Once again, using the whiteboard, write down all the processes your SME’s uncover.  You might notice that not as many ideas are as forthcoming as in Step 1.  This is normal.  After all, if people were aware that they were performing processes that were no longer required, they would have long ago stopped doing them.

Once you have compiled a list, next obtain the following information: How important to the organization is this process – high, medium, low or none?  How many people are currently performing this task?  How much effort is currently going into this procedure – high, medium or low?

Using Figure 2 as an example, the process entitled Create XYZ Reports can immediately be dropped from execution as it add no value to the organization, yet takes high effort with a high amount of resources.  In an ideal world, few of these ever exist, yet there can be numerous processes that can be de-emphasized that have a negligible impact on the business.  The simple procedure of identifying non-value add processes is quick and often provides surprisingly good results.

In a fast moving business environment, people are frequently so absorbed in the day-to-day running of the business that few have the time, inclination or tools to identify large ROI business opportunities.

When organizations have gone through The Power of Five exercise, they have been able to identify substantial savings in very brief periods of time. 

The Confiance Group would be delighted to guide you through a Power of Five workshop to experience the numerous advantages of undergoing such an exercise.