Most companies get distracted by the obvious fact that there are not enough resources to accomplish all their projects. They miss that one of the biggest issues in portfolio management is too many projects in the first place. My advice: first, clean your closet.
Parker Hannifin recognized the true challenge and successfully cut through the apparent complexity to simplify their portfolio. They wrote up their experience in a Frost & Sullivan best practices case study. Our guest blogger today is Katherine Burns, one of the authors, who uses the metaphor of her whole house as a kind of closet.
Cutting through the Complexity
I want to talk about my house. It’s a lovely house: it’s on a golf course, with a beautiful view of the 17th green. It’s in northern Virginia, not far from Washington, D.C. It’s got high ceilings and lots of sunshine and is painted pretty colors. When my husband and I bought it, it was just the two of us (well, and our Corgi, Lizzie). It seemed enormous: We barely had enough furniture for two rooms, let alone an entire house. We knocked around it, listening to echoes rebound off walls with no pictures, and wondered how we would ever need all this space.
That was in 2009.
In 2010, our son was born, and then in 2012, our daughter. The empty rooms are now pink and blue and filled with baby things, and the rest of the house has been equally overtaken with pack ‘n plays and swings and bouncers and high chairs and behavior charts and trucks and dinosaurs and TRUCKS. The toys are everywhere. They have invaded my kitchen table, my living room, my basement, my garage. They are under couches. They are between couch cushions. They are in toy boxes.
We have a lot of toy boxes in our house. It started with a lovely wooden one in my son’s room, a cute little bench painted with soccer balls and footballs that opens into an enormous box, more than enough room for all his stuff (I’d use a more precise word, but there really isn’t one. It’s just… stuff). I thought he’d never fill up that enormous box. And then we had to buy another toy chest, this one just for balls. And then we had to buy another one, just for stuffed animals. And then we had to buy two more for my daughter’s room, and then three more for the living room (one for my daughter, one for my son, and one for their combined collection of matchbox cars, which, yes, require their own box).
Our house now feels far too small and cramped for the four of us – five, if you count Lizzie the Corgi. How did it ever feel big? We need more space!
But here’s the thing: If we get a bigger house, we will fill it up just as surely as we seem to fill up toy boxes. Isn’t there some law of physics about that and water? Like, displacement or something? Well, it’s true, and there you have it. If you invite the empty space, you will put something in it. Probably another matchbox car, or another dinosaur. Trust me, we need neither.
Would a better solution be to simplify? To just reduce the number of toys, put a cap on the number of toy boxes? To say, “Enough is enough,” and leave it at that? Probably – but YOU try telling that to my three-year-old.
It’s a valid point, though, that complexity arises when we invite it, and that more usually isn’t better- usually it’s just more. I promise this has a professional application, so bear with me, we’re almost there.
What if you were to take the sentence, “I am drowning in toys,” and change it to, “I am drowning in data?” What if you take, “I keep expanding my storage, and all it gets me is more toys, which I already had too much of to begin with,” and change it to, “I keep expanding my dashboard, and all it gets me is more pages of data, which I already had too much of to begin with?” We’ve all been there. Those moments of, I can’t even see what’s important anymore, because it’s camouflaged among so many unimportant things. Perhaps most significantly, we’ve all had that moment of wanting to turn back the clock – take away the toys, strip away the data – but how do you explain that to a three-year-old (or an irate colleague who firmly disagrees with you about what should stay, and what should go, or whether anything should go at all)?
I decided to explore this a few months ago, and found myself talking to the wonderfully creative Parker Hannifin. Parker Hannifin is a big, decentralized company that is comprised of 108 divisions, rolling up into 8 groups, which report into the corporate center. Just across their innovation teams, the corporate center found itself tracking more than 50 metrics (which were all calculated or defined differently, depending on the division). Multiply 50 by 108, and you can see why their dashboard was the size of a phone book. (Again, if you invite the chaos, it will find you.)
Now, here’s the cool part: Parker Hannifin managed to do with 108 divisions what I have been unable to do with two children. Some very smart people managed to say, “Enough is enough,” and rolled back those 50 innovation metrics to 4, which then enabled those smart people to see what was really important, without the distractions of the other 46 measures. With this simplicity came a greater level of insight and understanding than they had with a greater volume of data. Improved efficiency and profitability followed. They fought, rather than invited, complexity, and they won.
How Parker Hannifin did this is the subject of a recently published Best Practice Guidebook, which you can review in part here (if you’re a Growth Team Membership subscriber, you can get the whole thing here). If you are still interested, and feel like clicking on another link, click on this one! We recently hosted a webcast discussing Parker Hannifin’s experience in more detail, and one of those smart people from Parker Hannifin joined us for a lively Q&A. Bill Beane, Corporate Director of innovation Systems, told us all just what it was like to simplify, and why Parker is sticking with it, and what they’ve all gotten out of it thus far.
In sum, Parker Hannifin taught me that you don’t have to drown in clutter, and that you can, as Thoreau (who clearly didn’t have any children) once advised: simplify.
But I still need a bigger house.
About the Author:
Katherine Burns is a blogger of many hats: a Director of Strategic Communications during business hours, a mommy during every other hour, and a reader of mystery novels and watcher of old movies during any spare moment she gets (there are not many). Favorite blogging topics include paradigm shifts, cool things she’s read lately, and why we all might have been better off if we’d stuck with typewriters.