Your Scarcest Resource: Time is money, but few...

Your Scarcest Resource: Time is money, but few organizations treat it that way

Featuring Michael Mankins, leader of Bain’s Organization practice in the Americas and co-author of the Harvard Business Review Article, “Your Scarcest Resource”

SEPTEMBER 15, 2014

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Featuring Michael Mankins, leader of Bain’s Organization practice in the Americas and co-author of the Harvard Business Review Article, “Your Scarcest Resource”

Your Scarcest Resource: Time is money, but few organizations treat it that way

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SEPTEMBER 15, 2014

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent

DRAFT

Managing Your Scarcest Resource Safeguarding Organizational Time

Michael Mankins

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 7 LON 140909 Managing Your Scarcest ...

Time is money …

“Just as you would not permit a fellow employee to steal a piece of office equipment, you shouldn’t let anyone walk away with the time of his fellow managers…”

Andy Grove, former CEO, Intel


The dark side of Metcalfe’s Law

2000s 2010s

30K 25K

As the cost of one-to-one and one-to-many interactions declines, the number of interactions increases

The value of any network increases exponentially with the number of nodes in the network

Source: Bain estimates

Number of interactions per year

1970s 1990s 1K

9K 4K

1980s


Senior Review

The ripple effect of a single leadership team meeting

Note: Includes meeting time only; excludes work required to prepare for meetings. Source: VoloMetrix, n=5,830

~7,000 hours/year (~3.5 FTE)


Senior Review



~27,000 hours/year (~13 FTE)


Senior Review





Senior Review





Meeting overload leaves little time to think or work

Example Manager Time Budget (Hours per Week)

Meetings

Should not have been scheduled

Did not need to attend

Did not need to attend whole meeting

Needed to attend

21

Email

Should not have

received

Should not have

responded

8

Individual work

11

NecessaryIndividual

working time

Total = 40

>16 hours per week of time

can be liberated


Eight best practices for managing organizational time:

• Make agenda clear and selective

• Create a zero-based time budget

• Require business cases for all new projects

• Simplify the organization

• Clearly delegate authority for time investments

• Standardize decision process

• Establish organization-wide time discipline

• Provide feedback to manage organizational load

1

2

3

4

5

6

7

8


1. Make the time agenda clear and selective

• Focus always recognized as a key to Apple’s success • Each year, Apple’s top 100 held a planning retreat to identify the

company’s leading priorities • Members of the group competed intensely to get their ideas on

the short list of 10 top priorities • Jobs then crossed out the bottom seven- “We can only

do three”

1

This cut through the noise enabled Apple to invest the time of its top talent strategically, without dilution or waste, dramatically accelerating pace of

innovation

• Create a clear and aligned agenda that prescribes where the organization should spend (and not spend) its time

• Empower individuals to defer or decline time commitments that don’t reflect company priorities

Case Study: Apple, and the late Steve Jobs


2. Create a zero-based time budget 2

Thousands of unproductive hours have been liberated, enabling Ford to lower overhead costs and improve decision making, accelerating the

company’s turnaround

• Manage organizational time asset with equal rigor as capital assets

• Zero-base time budgets, as is often done for operating and capital budgets

• In 2006 when Mulally became CEO, the top 35 executives met monthly for “meetings week” (~15% of senior leadership’s time)

• The top team was asked to assess the efficiency and effectiveness of these regular meetings, eliminate unnecessary sessions, and shorten unduly long meetings

• Ford’s approach TODAY is a weekly session called the Business Plan Review - a 4-to-5-hour weekly session of senior executives to set strategy and review performance

• Content is standardized, reducing prep time

Case Study: Ford Motor Company - Alan Mulally (CEO)


3. Require business cases for all new initiatives 3

In less than three months, Newmont scaled back the number of initiatives by a third and refocused its collective time on its most important initiatives

- improving safety and operational efficiency

• Avoid “initiative creep” where seemingly sensible projects are added incrementally but few if any, are ever formally terminated

• Add stage gate processes to prevent investment without justification

Case Study: Newmont Mining - Gary Goldberg (CEO) • When Goldberg became CEO in March 2013, 87 initiatives were

under way at Newmont, each demanding the time of Newmont’s Executive Leadership Team

• To put a stop to initiative creep, Goldberg insisted leaders develop formal business cases for all ongoing and proposed initiatives – specifying the economic costs and benefits as well as the accountable executive sponsor

• Many of the on-going initiatives did not prepare business cases; others prepared business cases but had them rejected by Newmont’s executive leadership team


4. Simplify the organization (1 of 2)

Source: Bain & Co analysis; Volometrix

4

On average, adding a manager to an organization creates ~1.3 full-time-equivalent employees’ worth of new work—that is, his/her own plus 50% of another employee’s time; every additional SVP creates more than 2.6 FTEs

worth of work + a “caravan” of 1.6 FTEs

• Right-size and right-shape the organization to reduce unnecessary layers between CEO and frontline to facilitate information flows and decision making

• Optimize headcount and location by function

0

1

2

3

4

5

Jr Manager

1.3

Manager

2.0

Director

2.8

VP

3.6

EVP/SVP

4.2

FTE

Own time consumed

“Caravan” of assistants

Work created for others

Adding junior manager adds about a third of someone else’s

time

Most senior executives create work for about 3

other people


4. Simplify the organization (2 of 2) 4

Case Study: University of California at Berkeley - Robert Birgeneau, the university’s chancellor in 2010

• In 2010, Berkeley was facing a financial crisis - the California State Legislature had cut $150 million from Berkeley’s annual budget

• The administration had to streamline UC Berkeley’s administrative cost structure to safeguard funds and preserve the university’s reputation for excellence in teaching, research and access

• Robert Birgeneau, then Chancellor, launched “Operational Excellence” to dramatically improve the efficiency and effectiveness of Berkeley’s HR, Finance, IT, and general administrative support

By standardizing and simplifying work by function and sharing management across those units, Operational Excellence removed 100s of unnecessary

supervisors and freed up an enormous amount of organizational time

The restructuring and simplification has saved the university >$120 million annually while enabling Berkeley to deliver more with less


5. Clearly delegate authority for time investments 5

This cut the organizational time budget dramatically— by the equivalent of 200 full-time employees over a six-month period

• Create guidelines on who can organize meetings, including the meeting length and maximum attendance

Situation • Discovered that a regularly scheduled 90-minute meeting of

mid-level managers cost more than $15 million annually • Junior VP’s assistant was responsible for scheduling and the

team attended

Actions • Reduced the default meeting length from 60 minutes to 30

minutes; limited meetings to seven or fewer participants • Required approval by supervisor of the convener’s supervisor

(two levels up), for any meeting exceeding 90 minutes or including more than seven people

Case Study: Manufacturing Company


6. Standardize the decision processes 6

Profound impact on how decisions are made and executed at Woodside

A significant portion of the organizational time saved is now spent on efforts to improve execution and identify new growth opportunities

• Establish an organization-wide approach to decision making and execution to improve efficiency and rescue time for other purposes

• Clarify individuals’ roles and decision rights

• Australia’s largest independent oil and gas company had been operating with a matrix structure designed to foster greater collaboration

• Decision authority and accountability were murky - time spent coordinating across functions and business units rising steeply

• In 2012 leadership defined operating principles that established clear responsibilities, authority, and accountability for the business units, the functions, and the corporate center

Case Study: Woodside


7. Establish organization-wide time disciplines 7

• Improve the quality of the meetings implementing a few simple norms

• Case Study: Intel - Agendas with clear objectives - At Intel all meetings start with a clear purpose: to inform about topic A,

discuss topic B, and decide topic C - the procedure focuses attendees on accomplishing specified objectives

• Case Study: Ford - Advance preparation - At Ford, all materials for weekly Business Plan Reviews must be distributed in

advance so that participants can review them before the meetings - this reduces the time devoted to information sharing during the review

• Case Study: Dell - On-time start - Beginning each hour-long meeting only five minutes late costs a company

8% of its meeting time; Most management teams wouldn’t tolerate 8% waste in any other area of responsibility

• Case Study: Apple - Early ending, particularly if the meeting is going nowhere - Steve Jobs used to “call an audible” when productivity of a meeting declined

or participants were unprepared


8. Provide feedback to manage organizational load 8

Real-time feedback, combined with guidelines from the top, has enabled executives to modify behavior and liberate unproductive time

• Monitor and measure the critical variables affecting human productivity, such as meeting time, meeting attendance, and email volume

• Set targets for improvement

• Real-time feedback on organizational ‘load’ creates transparency into where organizational time is being invested and by whom

• Guidelines can be established by level and function in the organization to help executives modify their individual behavior

• Seagate and Boeing are experimenting with giving executives regular feedback on the “load” they are putting on the organization in terms of meetings, e-mails, IMs, and so forth

• Executives can monitor their load relative to other executives

Case Study: Seagate and Boeing

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