CHAPTER 17

Identify and Kill Outdated Objectives

by Jessica Avery

When we think of strategic action, we often focus on what new things we should start doing: What projects should our department or team take on to contribute to the organization’s end goal? What innovative business ideas should we pursue? While this forward thinking is essential, many managers forget a key step in achieving those results: leaving the past behind.

In his book The Three-Box Solution, Tuck School of Business professor Vijay Govindarajan introduces three “boxes” for allocating an organization’s time, energy, and resources:

Box 1: Manage the present by optimizing core businesses.

Box 2: Forget the past by letting go of the values and practices that have lost relevance.

Box 3: Create the future by inventing a new business model.

As managers strive to run a high-performing business, Boxes 1 and 3 tend to get most of the attention, while Box 2 is often forgotten. Deciding whether to leave something behind—especially if it’s a project you’ve devoted a lot of time and attention to—can be a tough choice. But just as it’s important to identify what you should be contributing, it’s essential to recognize and stop doing tasks and projects that interfere with or distract from valuable work.

Human Nature and the Aversion to Letting Go

As humans, we’re emotional beings, and our emotional attachment to initiatives can often stand in the way of a clear analysis of how much value they bring. The time and effort we’ve invested in a project in the past often blinds us to what it may contribute in the future. We need to put those emotions aside to judge the initiative on its merits and learn to let go.

In an ideal world, we’d be able use pure logic to make these strategic choices on what to cut. Think of Star Trek’s Mr. Spock when he assesses situations on the USS Enterprise. Unencumbered by emotion, his decisions on how to proceed come down to three simple steps:

1. He estimates the value of what he’s currently doing.
2. He estimates the value of what else he could do.
3. He then compares the two values. As soon as he sees that the alternative creates more value than the current option, he switches to that new path.

Spock is constantly evaluating options and making adjustments accordingly. The trade-offs that must be made for each decision come down to the basic idea of opportunity cost. Opportunity cost is the value of what you aren’t doing but could be doing. It’s the value of the new store that you aren’t opening, the new product you aren’t launching, or the additional sales you’d get from a new marketing approach that you aren’t executing on.

In general, we undervalue opportunity cost because it feels fuzzier and is harder to quantify than “real costs.” But being hard to value doesn’t mean that it has no value—opportunity cost may be the biggest cost that your company has. Think of how much the opportunity cost would have been if Apple had chosen to pass on the iPhone and concentrated instead on its core computer business. Simply put: If the value of what you are doing now is lower than the value of what you could be doing instead, you need to change course—and in business, that may mean letting go of work that had been successful in the past.

Say you want to add a new product line in your company. You calculate the potential value of the product line at $100,000 per year. But there’s a snag—in order to launch the new line, you’d have to take three sales and marketing employees off supporting a current product, which generates $50,000 a year and has been a solid seller for the company. However, this product’s sales are starting to decline. In this case, it makes sense to let go of the solid seller (lose up to $50,000) in favor of the bigger, more profitable opportunity (gain $100,000).

Assessing opportunity cost for new objectives is a guessing game, and so it will always feel risky, especially when your emotions get in the way. But not taking advantage of an opportunity can hold even bigger risks. Your team’s attachment to a “classic” product—one you’ve dedicated years to creating and selling—could mean wasting a lot of time and money on something that may no longer have value. These old projects ultimately become “zombie projects.” They live on because they’ve always been there, creating less and less value over time but refusing to die. Think about the social media team that spends hours writing dedicated social promotions that show no significant increase in sales. Or the marketing manager who creates email newsletters that have low open and click rates. Every minute that people spend working on an out-of-date objective is one where they are missing out on significant amounts of money by not contributing to the priorities that matter. (To see an example, see the box “The Curious Case of Telex.”)

Part of the reason switching to new opportunities is so hard is because of the status quo bias. Humans have evolved to have a strong preference for keeping things the same; we’re averse to change. This trait can be very useful, for instance, when it kept early humans from leaving the cave at night while the saber-toothed tigers were roaming. But it also means we remain wedded to projects and processes in our work simply due to habit. And it leads to inertia in organizations.

With emotions running high and a human inclination toward status quo bias, the deck is stacked against Box 2 efforts. It therefore requires a lot of active energy to break out of this inertia.

Assess What to Cut—and Finally Let Go

So if it’s difficult to clearly define opportunity cost and human nature encourages us to remain the same, how do you decide what to stop pursuing and implement that change? Start by asking the right questions of the initiative or task.

Make a project prove its worth

When looking at a potentially outdated project or objective, we tend to wait until we get unanimous consensus that there’s no harm in abandoning it. This default approach is wrong on three levels:

• Consensus generally arrives too late. By the time the process is so thoroughly obsolete that everyone agrees that it should be stopped, you’ve probably wasted years of resources that you should have redeployed.
• It puts the burden of proof in the wrong place. We require proof that stopping a project will cause no harm, but instead, we should be asking ourselves, “Can we prove that the project is creating value now?” Flipping the burden of proof in this way becomes a powerful lever for change.
• It looks at the value of the project in a silo. Deciding whether there’s no harm in abandoning an old process or initiative project takes the value it creates as a stand-alone benefit, rather than comparing it to the value of what you would do instead. Doing something that adds $1,000 may seem worth doing—but if you are so busy with your current business you can’t put resources into new endeavors that may add $10,000 of value if properly resourced, you are saving dimes but losing dollars.

To agree to continue pursuing something, you have to make the case for keeping it, taking into account other options and alternatives. For example, for a company using an outdated method of communication like Telex machines, this means asking, “What is the additional value created by receiving messages on the Telex rather than streamlining all communication to modern systems? What would we do with the extra money and employee time if we stopped supporting the Telex network?”

If the existing part of the business can prove that it’s adding more value than what you would do instead, then the organization should keep it. But if can’t, that’s a signal that it should be discarded.

Create a process for winnowing large, medium, and small projects

Projects come in a variety of sizes. Organizational resources are devoted to some large, strategic goals, but they’re also used for thousands of little tasks that you and your team tackle on a daily basis. Figure 17-1 illustrates the many projects that make up the work in your company—from large, organizational objectives that affect the entire workforce (the largest triangles) to group projects and goals that affect your unit (the mid-size triangles) to small daily tasks on an individual’s to-do list (the hundreds of smallest triangles). Each of these three areas benefits from a different approach when deciding what—and how—to cut.

Large goals above your group. Unsurprisingly, the biggest triangles use the largest amounts of resources, and cutting such objectives would allow significant resources to be deployed to more valuable alternatives. Deciding whether one of these triangles should be removed requires answering two key questions: What is the value that they are creating? And what is the value of what else we would be doing?

As a manager, you may not have the ability to answer these questions or make these large-scale cuts in your organization. Changing projects or processes that affect companywide strategic objectives instead requires a top-down approach. These cuts will likely be highly visible and, unless these activities or products have become obsolete and are creating zero value, getting rid of them will be thorny and contentious. Arguments between groups of stakeholders will likely stall the process until upper management steps in to make the hard decision.

Midsize goals within your group. As a manager, you can act as identifier, evaluator, and often decider on the many midsize projects and to-do items that are primarily in the domain of your group. Keep your group’s core goals in mind at all times and ask yourself whether what you and your team are doing is necessary for a given goal: Why are we doing the task? Does it add value? Has that value been shrinking? For instance, is your group creating reports that don’t generate follow-up questions? Are you managing customers who buy less and less? Are you marketing to segments that are becoming less relevant?

Look for clues that may indicate an incipient zombie task: less feedback from stakeholders and less urgency around the task. For instance, if there’s a delay, are there repercussions? Listen to your gut: If doing a task gives you a vague feeling of pointlessness, you may be working on an emerging zombie item.

Small tasks within your group. A large portion of the work of a group is the hundreds of smaller tasks that keep everyone busy. Individually, these tasks don’t have much impact if they become zombies—they may add a few minutes back to a person’s day. Cumulatively, however, they are a huge drag on the organization.

For instance, is it really necessary to proof three drafts of a marketing mailing for the independent plumbing suppliers? Or was the second draft good enough for this shrinking market? What could your team members be doing with this time instead? This task may only take 10 minutes of a team member’s day, but cut that, along with dozens of other small tasks that could be removed, and you’ve freed up a few hours for your team member to work on other projects, like updating your company’s website with new materials to bring in prospective customers.

Each member of your team should be encouraged to spot and remove these items—and replace them with higher-value work. If there’s a clear set of group priorities, this can happen naturally. If you assign someone a new high-profile project, they’ll prioritize it and instinctively remove lower-priority items from their to-do list to make room for it. But it also helps if you can encourage and validate this trimming-back process. Make it clear that because you are adding higher-priority work for the group, you expect that existing work will need to be reshaped, delegated, or discarded to accommodate the new objective. When team members understand and internalize the group’s priorities, they can use those priorities as a lens to examine their own work and make necessary cuts.

This process won’t be perfect. By actively adding high-value priorities and shedding lower-value items to make room for the new work, at some point you or your team members will make a mistake. One of those low-value tasks will turn out to have more value than you thought and will need to be restarted. When this happens, don’t abandon the new process or blame the employee. Add back that work, and acknowledge its medium value. If you discover that some people are making too many calls that backfire, have in-depth discussions with them about how they are prioritizing their to-do list. On the other hand, if you see that no one on your team makes any mistakes, it’s probably a sign that they aren’t pushing the process hard enough.

The goal here is to be nimble and flexible at all levels and to move the organization toward the future. Leaving the past behind requires that you put aside your natural biases and require that all objectives and projects prove their value. By actively identifying and weeding out Box 2 items—and encouraging your team to do the same—you can be assured that the priorities you’re working toward offer the most value to your business.

__________

Jessica Avery is the Director of Business Analytics and Insights of the Harvard Business Review Group.