Here is something that caught our eye this week:
What’s wrong with making the good, better?
Often in small businesses, the quality of systems, processes, and even assets can vary greatly. Such a spread can make it difficult to determine how to allocate time and energy most effectively. We were reminded of this challenge when we recently read a Seth Godin article that reinforced our perspective. To paraphrase, imagine you run a small business with a fleet consisting of two vehicles. One gets 10 miles per gallon and the other gets 30 miles per gallon. For simplicity, let’s also assume that each vehicle travels the same distance every day (150 miles). Total fuel usage per day, in this case, is 20 gallons (15 gallons from the 10 mpg vehicle and 5 gallons from the 30 mpg vehicle).
What would decrease total fuel usage the most, upgrading the 30 mpg vehicle to a hybrid that gets 100,000 miles per gallon or upgrading the 10 mpg vehicle to match the other vehicle at 30 mpg?
It’s got to be the hybrid, right? After all, 100,000 mpg is ridiculous! It is over 3,000 times more efficient than the 30 mpg vehicle. Going from 10 mpg to 30 mpg is only 3x more efficient. The decision is obvious.
Not so fast. It’s true that swapping in the hybrid for the 30 mpg vehicle is a massive pick-up in fuel efficiency, but that vehicle is already pretty efficient and only accounts for 25% of your total fuel usage. Consequently, the maximum you can improve from replacing that vehicle is only 25%.
The other vehicle represents 75% of your fuel usage, so gains there are more impactful. Some simple math shows that by improving the least efficient vehicle you can double your fuel savings compared to the alternative.
We love the concept this thought experiment highlights. There is such a huge tendency to focus on making the good, better. It is generally easier and more enjoyable. After all, who doesn’t want to talk about their new electric vehicle? But, unfortunately, it is also not as impactful as diving into what’s wrong or broken or not working. While some say we should lean into our strengths, we have found that a focus on attacking weaknesses is where true transformational change occurs. So, looks like no Tesla’s for our fleet anytime soon.
Have a great week,
Your Chenmark Team