How Sunny Delight Cut Overhead by 33%
The Cure for Corporate Bloat
CEO William Cyr keeps the company efficient by asking employees to constantly prioritize work using the '90% solution.'
00:11 William Cyr: So many big companies today are really struggling with "they get periods of growth, they expand, they hire more people, and then the growth slows, and they ultimately end up having to do mass layoffs." And it's almost a cliché now. It happens so frequently. Several companies have been through it several times. It's a big problem. And you say, why does it have to happen that way? Isn't there a better way to do this? And we've developed for ourselves what I would call the "90 percent solution." And the 90% solution means that you look at the scope of the work that you really need to do to be successful. Do a good strategic planning process, map out what you need to do. And then you only staff your organization to do 90% of it. And when you do that, what it does is it forces every employee to make priority choices everyday about what work is not gonna get done. And hopefully, the lowest value 10% is what gets dropped off, and that's what you expect every employee to do.
01:01 Cyr: Now that doesn't happen on day one, because every employee, every manager has been conditioned as part of their entire career to never say "they can't get it done," to always plan for doing more, or having a bigger organization get more done. But if you're really rigorous, and you say, we're gonna hold on to this 90 percent, they go through this natural evolutionary process where the organization kind of goes on tilt, they can't get all the work done, they're working long hours, people are getting frayed nerves, there's a lot of stress in the organization. And then ultimately, when that breakdown happens, that's when people are willing to change their approach or change their habits. And that's when you start having the conversations about doing a better job on priority setting. And the concept of priority setting changes the value from "I can do everything" to "I'm gonna be really good at priority setting."
01:45 Cyr: And when you change it to 'having that conversation is a victory or success' instead of a sign of weakness or a sign of failure, that's real cultural change. And we've done that. We've done that to the point where now it's okay to say, listen, you gave me 10 things to do. I'm only gonna do eight of them. Tell me which two you don't think make any sense. And that's not a sign of weakness. It's a sign of good disciplined strategic planning. As a result, we run our company today with one-third less overhead than our previous corporate owner had. And that's a big difference because that one-third less overhead, we've invested back in marketing support that has helped us take a business that was declining and make it grow.
02:20 Cyr: Now sustaining this 90 percent thing is not an easy thing to do because once you get it going and people are kind of comfortable and efficient, they sometimes drift back into their old habits, and they stop and think, "Well, jeez, if I had one more person, then I could get this extra piece of work done." But what they miss is adding one person in one part of the company oftentimes turns into another part of a person in the next function and two people in another function and three people in another function, and it never goes up evenly.
02:47 Cyr: In our company, you add one marketing person, they're incredibly productive people, they work incredibly hard. But they create a lot of work for our R&D people, for our market research people, for our salespeople, for our manufacturing people. And so before I add a marketing person, I wanna know that I'm really willing to operate with not just one more marketing person, but with eight people, more people across the company. And we recognize that residual effect. It makes you think twice about adding people. And that's been the discipline that we've practiced. And unfortunately, that discipline doesn't seem to happen very well in many of the big companies. They lose sight of the residual impact, they're silo-ed, they're too big to know what's going on across the whole company. But for us, that's the cure for corporate bloat, is the 90 percent solution.
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