This article was written by Ken Leaver who comes from a product & commercial background. He has founded multiple companies and held senior product positions at SEA tech companies like Lazada and Pomelo Fashion.
Now Ken runs his own agency that helps early stage startups with content and traction called End Game.
Guest Author: Ken Leaver
It was 2004 and I was doing my MBA internship in the Garden City, New York HQ of Bookspan. Bookspan was a mail order book club business owned by Bertelsmann, the European media behemoth.
Many folks these days probably do not even know what a mail order book club is or was. Basically you would get an offer in the mail to buy a book (or several books) at a very attractive low price, eg. $1.
But you were also committed to buying a number of books over the course of the year at the full price. It was basically the book equivalent of BMG Music Club, which was another Bertelsmann business that did the same thing for music CD’s and was very popular in the US at that time.
Anyway, back to my story. Basically I was hired for a restructuring project because in 2004 the book club business was in major decline due to the Internet. And so a team of about five of us were put together to decide how to cut costs.
The person managing the project was an ex-McKinsey director and a machine of a consultant. I reported to him.
We used a McKinsey methodology that he had implemented with a number of clients already while at the firm. The methodology entailed going to each person in each division of the company and boiling what they do down to a group of services (usually max 10 per person) that we would standardize across the company.
Then you had the person estimate how much of their time they spent on each service and applied the person’s salary to figure out what the service was costing the company. You also did the same with any non-salary expenses.
When you were done with the exercise you had lists of services across each division and knew exactly what they were costing the company. You could then decide….
- Do we need this service or shall we cut it?
- Or maybe we should be spending a lot less on it?
By making these decisions of what to cut/reduce you then cut the people associated with those services. I believe our recommendation was something like a 20% headcount reduction across the entire company (for it to survive).
McKinsey has, I believe, used this same method across hundreds of clients across the world.
My Role on the Project
I was one of the two people in the project that went and interviewed lots of people to align on what services they did and how they allocated time to it.
It was a lot like the classic show “The Office” because I literally was going around asking what their job was. And they knew that how they answered would impact whether they would still have a job in the future.
It would often take time to boil down what they do to max 10 services because they would typically want to make it sound like they did a ton of things. So you’d have to constantly repeat the rule that we’d need to whittle it down to just 10. Which we always did.
And once you aligned on how they spent their time across these services, you would see blaring inefficiences of things that add almost no value but were expensive to the company.
The individual of course tried to dress things up to make it look like they were spending the most time on the higher value add stuff…. But then those activities would also start to look too time intensive & expensive. So they needed to strike a balance.
In the end… they needed to allocate 100% of their time. And there was no way to ‘hide’ any time. The fat would pop up somewhere.
What did this exercise teach me?
When the headcount was reduced later… I’d heard later that revenue did not take a hit almost at all. Because all of the core processes/services to operate the company were still intact.
And there was so much ‘fat’ (ie. wasted time & resources) that was lying around… simply because there wasn’t transparency to it. Which if you cut, does not really do any damage.
I realized from this exercise that there was massive power in having this level of visibility.
How this lesson guides my current work method
I operate with my team today under the guiding philosophy that:
1st Rule: Everything we do is a task in clickup.
- If it is not in clickup it does not exist to me.
2nd: Any work you do should be reflected in one of your clickup tasks.
- Perhaps as a comment mentioning what you did or a status change that you completed it, etc.
- Typically I am following most tasks in the company… meaning I go through hundreds of Clickup notifications each day (but very quickly)
But now pause and think about the power this gives me… I know:
- how many tasks each and every person is working on
- how much they did in a day from their Clickup updates
It is similar to my Bookspan example above… except at a much more granular level. And thus it is easy to mentally allocate cost to these activities because I also roughly know what each person is paid.
My example implementing this in a client
Sometime back I implemented Clickup in a small company and we tried to stick to this philosophy that everything everyone does should be represented in Clickup.
There was of course quite a bit of pushback…. but I had support from the founders and so we made it happen.
And as soon as everyone was done with it and were making their updates in Clickup… it became apparent just HOW LITTLE certain people were doing.
It was now obvious why some folks were pushing back… because they were barely doing anything. lol
Transparency had revealed that (in my view) they were probably bloated on costs by at least 2x. Many of the full-timers only really needed to be part-time, and certain people probably should have been let go.
You will get 50-200% more out of your team by operating this way
Someone recently asked me “Ken… I see that you implement Clickup as a service?”
And I get this question a fair amount of time… because it is easy to think of this as ‘just implementing Clickup.” But there are tons of folks that implement Clickup and I honestly only use the most basic functions. So I am by no means a technical expert in Clickup.
And I answered like this “Yes it is true that I implement Clickup…. but what I actually do is I get a lot more out of your team than you currently do.”
I’d say 50% more productive is the minimum i’d achieve if I was managing the team by my method. And often it would be far more than that…. as high as 200% more.
When I answer like this it always brings a bit of a surprised, sometimes negative reaction. So I need to explain…
How do you get such a massive productivity gain by operating like this?
Oftentimes folks think I’m just going to make them work more… And this is not necessarily the case.
Rather these are the buckets of improvements that I typically see when I implement this:
1st: I can quickly spot the folks that are doing very little.
- And we increase their workload to what I consider a ‘fair’ level for their position / compensation.
2nd: I can quickly spot folks that are just not very good.
- Because you now have a much more magnified level of transparency.
3rd: Everyone gets more efficient because of better coordination
- It’s just much easier & faster to get help from team members when everyone works in this disciplined way.
- I can unblock them very quickly if they are stuck.
4th: I can quickly spot when folks are working on the wrong priorities.
- And so I stop them on that task and ask them to work on a higher priority.
- TONS of time is saved with this one in my experience.
5th: You can replace some full-time roles with part-time ones
- You quickly see where people are not at full capacity but are full-time employees
- And so you start to replace those functions with freelancers (Upwork is my platform of choice)
6th: It is not uncommon for people to actually volunteer to take on more work
- This is because they know that their evaluation is based on what they achieved in Clickup.
- And there is now a much clearer relationship between what they do and the results they are evaluated against.
Closing Thoughts
Transparency is extremely powerful. When I see teams that work with poor levels of transparency… I find that if I dig in a bit, the team is ALWAYS quite inefficient.
I literally can’t think of an example off the top of my head from my 20-year career where this was not the case.
Maybe some teams can afford to be inefficient?
But I have a feeling most of those teams won’t be around long 😉
Interested in learning more about how this method can help your team? Book a call: https://cal.com/endgame/10x-how-you-execute
