Bill Canady explains zero-up, the third stage of the 80/20 process. Organizations map resources into four quadrants, then capture about 12.5% from the lowest-value work and redeploy it elsewhere. The Earn-to-Write-to-Grow ratio should hit 2 or higher; the phase takes 3 to 6 months and requires moving people and managing resistance.
You know, the zero-up phase is, is really probably the most exciting and, and scary phase of, of the entire, uh, implementing the 80/20 process. And, and it's really driven around just a couple ideas. So you've gone through segmentation, you've simplified the business, right? So you got it where you think it should be. You've now simplified it and you're looking at, what do I do next? And the basic tenet of 80/20 is finding resources that you can take from are not effective and putting them where they can be effective, where our customers value, where our employees value, where, People showed that they want those resources. This is what happens in the 80/20, and it's the time you're gonna actually make decisions that's gonna change everything going forward. So it makes it a little scary. But let me first stay with you by just, by starting out by saying that it's actually, it's actually the least risky part of it. You now understand your business. You see clearly where you're making money at, and you see clearly where you're not. And if you think about how we do the business, we, we put it in the quad. So it's just like 25%, 25%, and so on. So we have 4 quads that we're setting there. And the idea is you go into quad 4 where you're not making any money and you're going to try to capture half of those resources. Boy, it'd be great to get them all, but it's just been impossible for us. Maybe, maybe this one will be different. You'll, you'll get them all. But typically what you find is of that 25% of all your resources, you can get about half, about 12.5% of those. Those resources, you're going to pull them out of nonproductive work, non-value-added work, And put them over to where there's real value at, right? And it's important you have to do this. And it's really around this reason is we do not have unlimited resources. No one has. I don't care how big you are, how rich you are, or conversely how poor you are. You have the resources you have, your structures around it. You need to redeploy that, right? And your guide through the entire thing is the ratio that we call the earn to write to grow ratio, where we're looking to get a 2 or above In that ratio. Once you have that, once you start getting from a 2 to a 3, you go faster. You can't go faster until you actually have your resources where they need to be. You just don't have the money. And when I think back over my career, there's been so many times someone says, go fix this, and they expect me to not only keep what I was doing, but somehow magically come up with more hours in the day, more time, more people, more cars, more whatever it was to go do it. We just didn't have it. This gives you a way to identify where the resources are, capture those and then replace those or place those into their new spot. It is a powerful thing to do. It's also a little bit scary because you're going to change things. The most difficult piece that you go through is the change management piece in there, right? Your customer is going to love being taken care of better, I'll tell you that right now. And the customers that are not buying very much, they won't even notice the difference, right? Because you're, you're not really an important vendor to them, so they don't notice the fact that you're there or not. But your big customers do notice Once you've identified those resources, you have to transition them from what they were doing to, to what you need 'em to do. Now, one of the things you're gonna have to deal with right outta the bat is maybe those resources don't have the same skillset. Maybe the small customers require someone going out and seeing them in person. The big customers, for whatever reason, need an online presence. The person who's out making that call may not have the ability to build, build a website or vice versa, as the case might go. So it's recognizing that it's resources. It's not particularly a person or particular resource. It's just the value of that, what you're trying to capture. So you've identified it, you've segmented it, you've simplified it. Now it's time to go capture those resources. Once you identify that, you start moving them over. Expect it to take probably about 3 to 6 months to get through it with most of the pushback coming from your current organization, right? Which makes sense. People don't like change. People look at it and go, hey, what's in it for me? And I know what I'm doing today is working for me. It may not be the best, But this is unknown over here. As the leader, you're going to have to spend time getting people comfortable. You got to articulate the vision very clearly. You got to show it, what's in it for them. And ultimately, it's going to be that individual's choice. It's going to be that person. They're going to decide whether or not they want to be part of it going forward. Your job as the leader is to get it done and do it in a very thoughtful manner where you treat everyone with dignity and respect. That's really about what the heart of the zero-based process is. That's really what you're trying to do is make that shift and make it in such a way that you Reduce all the risk you have, and you should be able to do it 'cause it's just math. And the key to it, I think at the end of the day, is communication. Once people understand what's going on, once they get it, they want to be part of a winning team. They want to be in an area that not only can they take care of them, their customers, but they can take care of themselves and their families. I think this gives people the best shot to do it.
