In the year 2000, then Bank One posted $511 million in net losses as they hired Jamie Dimon to take over the reigns. Over the next 6 months Jamie Dimon cut $500 million in costs ($1 billion in his first year) in what was called “waste reduction efforts”. Can you imagine the comments when he announced his plan of action? I am sure he was called chicken-little, over-reacting and the other packaged responses typically used by those who lack action. Dimon pushed profit and loss reporting and analysis down through the organization to increase the understanding and change the management approach at all levels. He changed compensation structures to more appropriately align leadership decision-making with results. He walked away from non-profitable customers and even told long-time sacred cows to pay for their own Wall Street Journal. Many said he was the wrong guy for the job and was a prolific deal maker but that was the limitation of his talent. Boy were they wrong (remember, this is the guy that proactively and independently gave himself a 93% pay cut when heÂ accepted the bailout funds). Hindsight is most interesting if we chose to view the past with objective lenses.
Stage 1: Define the strategy. Dimon could have asked for a 6 month analysis of where they could cut the “fat” or “waste”. Dimon could have sent out RFP’s to consulting companies for 6 months deciding which consulting company would execute a project to find the “fat” or “waste”. He could have then followed that up with a series of SWOT analysis on alternatives surrounding “how” to cut the fat. It could have taken 2 years. He knew there was inefficiency. He knew the inefficiency was fat and he knew he could get rid of it.Â Not everyoneÂ agreed – but he knew it.Â Go after the fat that you know exist and simply get rid of it.Â The developer that is counter-productive.Â The great developer that is ambivalent to estimation accuracy.Â The process rich with churn and low in productivity.Â If you know where it is – make a plan to go get it.
Stage 2:Â Just Do It!Â Imagine a “waste reduction” that will save the organization $10 thousand dollars a day.Â Now, urgency ought not be confused with recklessness or panic.Â But, delaying that gain by 2 weeks just cost the company $100 thousand dollars – the cost of indecision.Â Was the risk mitigated by the analysisÂ equivalent to $100 thousand dollar exposure?Â Fear and hope are not proper leadership strategies and if you know it – just do it.
Some people see inefficiencies as a part of their core vision.Â They are just wired that way.Â It reminds me of theÂ Matrix – they just “see it”.Â Obviously, all aspects of a process and impacts must be taken into proper consideration in order to mitigate risk.Â But sometimes “fat” or “waste” is relatively obvious.Â In consulting, did we not call that “low hanging fruit”?
The last time I checked, I think Gartner still indicates only 40% of all code actually makes it to production; only 40% of every IT dollar spent actually realizes ROI.Â There is enough inherent “waste” in our business – go after the “low hanging fruit” and increase your own individual numbers.