The ‘Addition By Subtraction’ Principle

By following the principle of ‘addition by subtraction’, company managements can eliminate inefficient machines and people and also customers that drag down efficiency, observes Murugan Santhanam

“Can you increase value by subtracting something?” The management coach posed a thought-provoking question.

I quickly ducked behind my book, hoping to avoid being called on by the coach. But I wasn’t alone; most of the other attendees seemed to be hiding too.

“How can value increase if we subtract?” my friend whispered, clearly puzzled.

I shrugged, giving him a look that said, “How should I know?”

After a brief silence, a voice from the back broke through: “Sir, if we subtract a negative number, we can get added value!”

“Well said! You are right!” the coach responded, clearly pleased. “So, 5 – (-2) is 7. Do you all agree?”

We all nodded, feeling a bit sheepish for forgetting such basic math.

“Now, can you think of how to apply this equation in our work and personal lives?” the coach asked.

“Oh man, he’s only asking questions!” I muttered to myself.

“Sir, with the reduction, that is subtraction, of dress size, nowadays the girls are more beautiful,” a cheeky backbencher quipped.

Everyone burst into laughter.

“He’s correct. We can apply addition by subtraction in this case. But let’s find some better examples,” the coach said.

An incident from my work life flashed in my mind, and I stood up to share.

“Sir, when I was assigned to bail out a BIFR-referred mill, I suggested the management to sell 6,000 spindle capacity of old ring frames and use the proceeds to modernize the remaining capacity. Initially, the management was hesitant, but they eventually agreed. Now, that mill has come out of BIFR and is thriving.”

“Good example. We not only subtract inefficient machines, but we can also subtract people. Jack Welch, the greatest CEO of GE, had it right: you should continually subtract the bottom 10% of your team. Subpar performers drag down an organization. Setting the expectation that you will regularly evaluate and remove weaker folks while promoting stronger ones is the foundation for a performance-driven organization and strong people culture. Remember, your team can improve not by adding more talent, but by shedding people or practices that inhibit success,” the coach explained.

“Does dropping a bad and unhealthy habit come under addition by subtraction, sir?” my friend asked hesitantly.

“Yes, sure! Why not? It will certainly improve your health and other resources.” The coach’s acknowledgment made my friend beam with happiness.

The coach continued, “As you know, the 80/20 principle suggests focusing your time and effort on the 20% of things that typically determine 80% of your results. This is another way to apply the ‘Addition by Subtraction’ principle. Subtracting your valuable time spent on unnecessary tasks will add value to other important tasks and help your programme move forward.”

“Sir, what about customers? Should we keep adding them or is there a reason to subtract some?” one attendee asked.

“Good question. This can be applied to customers too. Having good customers is a strength for any firm. I’ve seen customers who strive to grow together with the supplier by giving feedback, introducing new items and helping with forecasting. There may be some customers who continuously pull you down by complaining unnecessarily and suck your energy and time off.  Be willing to fire the laggards, regularly subtracting the least valuable 5% of your customers who buy small volumes and unnecessarily require more resources, time and energy. I’ve seen many mills fail because they added too many customers without analyzing their worthiness,” the coach explained.

“I think we need another CEO besides the existing CEO,” one attendee suggested.

“Who is that?” I asked.

“Chief Eliminating Officer!” he replied.

We all laughed.

Math had never been so much fun in my school days, nor as productive as in that meeting.

(Murugan Santhanam is the author of this article. He is Managing Director of Texdoc Online Solution Pvt. Ltd.)