by Anthony K. Tjan | 9:00 AM September 5, 2012
“Less is more,” the architect Ludwig Mies van der Rohe liked to say. You may or may not agree with this as a philosophy of architecture and design. But in the world of business it can be a remarkably effective approach. I owe this insight to my friend Richard Saul Wurman, the founder of the TED conferences. In a recent conversation, we discussed the power of subtraction as it applies to innovation. By removing things one creates self-imposed constraints, but also clarity and a cleaner context for inspired innovation.
What sticks with me most about the conversation is the simple pragmatism and prescriptive nature of the word itself — subtraction. How much more direct can you get than to say you need to subtract something? In business, we often dance around the subject by using MBA-speak like “focus,” “alignment,” or “prioritization.” These words imply the need to edit, clarify, and rethink, but aren’t as direct as asking someone to subtract.
Here are five “laws of subtraction” for business leaders to consider:
1. Subtract Your Priorities. In an earlier post I described the critical CEO best practice of writing an annual letter to the board outlining one’s top priorities. When CEO priorities are codified, it provides a recurring reference source for the board and employees. Intellectual honesty around such a document enhances self-awareness and avoids priority drift and the “shiny ball syndrome” from which many of us as founders or CEOs suffer. For this practice to be effective, there can be no more than five priorities at any point in time. Most CEOs, though, gravitate toward ten top priorities, maybe even more. Subtract your way down to the top five — or, even better, the top three. And avoid cheating by “bucketing” ten things into five categories! Each priority needs to be distinct and mutually exclusive.
1. Subtract Your Priorities. In an earlier post I described the critical CEO best practice of writing an annual letter to the board outlining one’s top priorities. When CEO priorities are codified, it provides a recurring reference source for the board and employees. Intellectual honesty around such a document enhances self-awareness and avoids priority drift and the “shiny ball syndrome” from which many of us as founders or CEOs suffer. For this practice to be effective, there can be no more than five priorities at any point in time. Most CEOs, though, gravitate toward ten top priorities, maybe even more. Subtract your way down to the top five — or, even better, the top three. And avoid cheating by “bucketing” ten things into five categories! Each priority needs to be distinct and mutually exclusive.
2. Subtract Your Pitch Points. Countless sales pitches get ruined because a prospective buyer is overwhelmed by the choices presented, by sellers creating multiple choice. That’s why you should subtract your three (or more) pitch points down to one core idea. Great pitches are “do it for me” stories rather than “do it yourself’ or “choose your own adventure.” Conviction comes from subtracting the peripheral and focusing on the most salient story. While I have always been taught to pitch or do presentations around three key points, it is easy to slip into focusing on three supporting points and lose the overarching big idea. Even worse than getting lost in three supporting points is trying to pitch three distinct ideas. Subtract down to one. On a related note, be cautious of the amount of material (PowerPoint slides, documents, etc.) you use. There’s a propensity to add materials rather than subtract. One of the most successful meetings I have had came after I recast a 35-page deck to a one pager during an overseas flight to share with the client upon landing. A simple story that repeats a consistent theme is better than a truckload of documents and demos. Subtract and seduce around a single idea.
3. Subtract Your People. Jack Welch had it right: you should continually subtract out the bottom 10% of your team. Subpar performers drag down an organization. As the saying goes — A’s attracts A’s while B’s attract C’s. Not everyone can be an A player, and you owe it to those who are to regularly prune out the bottom. Setting the expectation with your employee base that you will be regularly evaluating and taking out weaker folks and promoting stronger ones is the foundation for a performance-driven organization and strong people culture. As long as there is a good review and development process (e.g. objective and regular), people will respect and embrace what may at first feel a little cold and Darwinian.
4. Subtract Your Customers. It is not only employees that need regular evaluation and subtraction, but also your customers. Be willing to fire the laggards, regularly subtracting out the least valuable 5% of your customers. It is a fallacy that you need to keep all your customers because many of the small customers will become large ones. Look at your data to see if that has really occurred. What you are more likely to find is a stubbornly consistent 5% of your customers who buy in small volumes and require higher maintenance as a cohort than other groups. You want to give the most time, energy, and service to those who will provide the greatest long-term reward and loyalty. This means realizing that just because you can sell something to someone today does not mean that you should.
4. Subtract Your Customers. It is not only employees that need regular evaluation and subtraction, but also your customers. Be willing to fire the laggards, regularly subtracting out the least valuable 5% of your customers. It is a fallacy that you need to keep all your customers because many of the small customers will become large ones. Look at your data to see if that has really occurred. What you are more likely to find is a stubbornly consistent 5% of your customers who buy in small volumes and require higher maintenance as a cohort than other groups. You want to give the most time, energy, and service to those who will provide the greatest long-term reward and loyalty. This means realizing that just because you can sell something to someone today does not mean that you should.
5. Subtract Your Baggage. Finally, on a lighter note (literally), subtract one-third of the stuff you think you need to pack for any given trip. I once read that you should pack in the following way: lay out everything you need on a bed and take half of it. I have never been able to quite manage that, but subtracting out a third works for me. Business travel is strenuous, so travel light, and efficiently. Further, being forced to edit in advance has helped me make better choices on what pieces of clothing work best for a meeting or event. Who knew that subtraction could help so much with your sartorial suaveness?
Through the power of subtraction, the above five “laws” can drive more focused effectiveness and success. And if it is too hard to remember the specific examples above, just remember this: when in doubt, subtract.
ANTHONY K. TJAN
Anthony Tjan is CEO, Managing Partner and Founder of the venture capital firm Cue Ball, vice chairman of the advisory firm Parthenon, and co-author of the New York Timesbestseller Heart, Smarts, Guts, and Luck (HBR Press, 2012).
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