Growth Acceleration: Adding by Subtracting OR Mitigating the Total Cost of Failure

Recently, while reading Atomic Habits by James Clear, he wrote about the concept of “Adding by Subtracting”.?

“Adding by Subtracting" is a phrase that refers to the idea of making progress or achieving a desired outcome by removing or reducing friction rather than adding more of it. This approach can be particularly useful in situations where there are constraints or limitations on resources, or where the problem being addressed is complex and cannot be solved by simply adding more of a particular factor.

In the context of business and economic growth, "adding by subtracting" can be important because it allows organizations to identify and remove defects from any process which mitigates barriers to growth. For example, a company might be able to accelerate its growth by streamlining its operations, eliminating waste/defects, or reducing employees who are not contributing positively towards corporate goals. ?

There are several key principles that underlie the "adding by subtracting" approach:

1. Simplicity: By focusing on the essential elements of a problem and eliminating distractions or unnecessary complexity, organizations can often achieve better results more efficiently and effectively.
2. Focus: By eliminating distractions and focusing on the most important tasks, organizations can increase their productivity and achieve better outcomes.
3. Efficiency: By streamlining operations and eliminating waste, organizations can improve their efficiency and reduce costs

This concept of “Adding by Subtracting” highly parallels my Six Sigma training.??

Years ago, I was fortunate to be asked to join the quality team at EasyLink (now OpenText) under the direction of Mr. Bill Robinson, V.P. of Quality.?At the time, EasyLink grew from organic growth and M&A.?Through several mergers and acquisitions, we ended up with disparage systems, manual processes, and attrition issues.?Our CEO, Mr. Tom Murawski, hired Mr. Robinson to bring Six Sigma Quality into EasyLink.?The team that made up internal Six Sigma team consisted of five employees that were hand selected by our CEO, as he knew, we were truly agents of change.??What I learned, and what was instrumental as I carried this knowledge forward into new companies and clients, is that Mr. Robinson taught us to apply the meticulous discipline of Six Sigma to the rigorous pursuit of delivering total customer satisfaction at every instance.?Revenue, productivity, and retention would be an outcome of this methodology.?

Our Six Sigma training included a methodology that removed friction/defects from internal processes as well as meeting customer expectations accurately and on time for a 100% satisfactory customer experience.?

How is this done?

The way we implemented Six Sigma is customer-centric since the customer defines what a “defect” is.?We surveyed and worked with both internal and external customers.?Our specific goal was to achieve a Six Sigma level of quality, which represents 99.99966% accuracy or fewer than 3.4 defects per one million opportunities.??

Our methodology was shaped by our customers, for our customers.?With vast improvements made, for customers, they were able to actually feel the difference in the reliability, performance, and responsiveness of these quality improvements.?

How Friction within Marketing and Sales increases Total Cost of Failure (Negative Outcomes)

Over the last three years as a Senior Strategist for The Pedowitz Group, I’ve helped multiple clients locate and remediate process defects/friction within marketing and sales with the goal of revenue marketing.??Marketing and sales are two essential components of a business that are responsible for attracting and retaining customers. When these processes are not well-defined or executed, it can lead to a total cost of failure (TCoF) that can have serious consequences for the enterprise.

Poor processes in marketing and sales can result in several negative outcomes. For example, if the marketing efforts are not well-targeted or effective, the company may not be able to attract enough customers to sustain itself. This can lead to a decline in MQLs, SQLs, and closed won opportunities, which can in turn lead to a decrease in revenue and profits.

Furthermore, poor processes in marketing and sales can lead to a lack of cohesion within the company. If different departments are not working together effectively, it can create confusion and conflict, which can hinder the company's overall performance and success.

To avoid the total cost of failure due to poor processes in marketing and sales, it is important for companies to establish clear and effective processes for both areas. This may involve developing a comprehensive marketing and sales plan, setting clear goals and objectives within both departments, creating a streamlined Tech Stack for automation, and implementing strategies to reach growth KPIs.

Overall, the total cost of failure due to poor processes in marketing and sales can be significant, but it is possible to avoid these negative outcomes by implementing effective processes and strategies. By taking the time to properly plan and execute marketing and sales efforts, businesses can increase their chances of success and avoid costly failures.

The overall benefits include:

• Improved customer loyalty.?A higher propensity of retention.?
• Time management.?Efficient business and more productive employees.?
• Reduced cycle time.?Mitigating defects in process.
• Prospect/Customer engagement.?Turning manual process items into system automation.?Enabling a higher level of engagement from prospects/customers.
• Strategic planning.?Six Sigma/friction remediation provides strategic areas to focus on improvement.?
• Decreases cost of poor quality – internal failure costs.?Rework, delays, re-design, shortages, failure analysis, and downtime.
• Decreases cost of poor quality – external failure costs.??Complaints, redoing services, losses due to sale reductions, and customers’ bad will.?
• Decrease cost of good quality – prevention costs.?All activities that prevent poor quality from arising in services or products.

Overall Total Cost of Failure as a Percentage of Sales:

From a use case lens, if your lead process is sending a lead to the wrong SDR/Salesperson, or there is a latency of lead assignments, and it has been consistently happening over this last year you can easily be experiencing approximately 6,000 defects which for easy math of $1,000,000 in sales would equate to $250,000 TCoF.??

In general, "adding by subtracting" can be a powerful way to make progress because it allows people to focus on the essential elements of a problem and eliminate distractions or unnecessary complexity. By simplifying and streamlining their efforts, organizations and individuals can often achieve better results more efficiently and effectively.?

Identifying Areas for Improvement

To successfully implement the "adding by subtracting" approach in your business, it is important to first identify areas where it might be beneficial. Here are some strategies for doing so:

1. Analyze your operations: Look for opportunities to streamline processes, eliminate waste, and reduce bureaucracy.
2. Identify friction/bottlenecks: Look for areas where there are constraints or limitations on resources that are hindering progress.
3. Prioritize improvements: Focus on the areas that will have the greatest impact and make the biggest difference to your business.

As we head into 2023, what internal processes are ready for improvements??Some questions to ask as you analyze internal processes:

·???????Currently, do you have any latency in lead routing? Or are leads being routed to the wrong SDR/salesperson??Are territory assignments truly up to date?

·???????What is your efficiency ratio of MQLs/SQLs and what is your closed won ratio vs. closed lost??Is your lead scoring optimized??What does these specific KPIs tell you?

·???????How is your data today??Do you have marketing actionable data that is truly trusted throughout your enterprise???Do you have a data strategy, hygiene, and overall governance implemented??How do you manage contacts that do not engage with your brand for a specific time period???Do you have trust in data and/or trust in reporting?

·???????Is your content and buyers’ journey optimized based on your ICP and buying committee??Are you targeting your right ICP?

·???????What percentage of the pipeline is attributed to marketing??Do you need to review your attribution model?

·???????What is your customer onboarding process? Do you have NPS figures to show actual feedback on your process? What is your current LTV and has there been any decay in the trend?

In this article, I have explored the concept of "adding by subtracting" and its importance in business and economic growth. I’ve shared key principles that underlie it and provide strategies for identifying areas in your business where "adding by subtracting" might be beneficial.

By adopting an "adding by subtracting" approach, organizations can simplify and streamline their operations, eliminate friction/waste/defects, and reduce bureaucracy, which can help them accelerate progress and achieve better outcomes more efficiently and effectively. Whether you are a business leader, or a member of your marketing/sales organization, the principle of "adding by subtracting" is a powerful tool for making progress and accelerating growth.

About the Author:

Tracy A. Wehringer uses her three decades of experience in helping clients reach their revenue goals and grow their businesses using revenue marketing best practices.?As a senior strategist focused on performance, with a talent for optimizing short/long-term returns, Tracy has held senior-level marketing titles with several global enterprises and has sat on two boards for over five years.??Her expertise includes revenue marketing, business transformation, data analytics, KPI strategy, digital marketing, and Six Sigma process improvement.? #revenuemarketing #processautomation #growthhacking #addingbysubtracting #automation #marketing #sales