This document discusses the concept of "hull speed" as an analogy for the limits of incremental change in an organization. It explains that boats have a maximum speed based on hull design called hull speed, beyond which additional power cannot increase speed. Similarly, organizations can reach a point where incremental changes no longer improve results and a restructuring may be needed, just as modifying a boat's hull is required to exceed its hull speed. The document provides examples of changes that initially improve performance but eventually reach diminishing returns. It prompts the reader to consider if they have observed this phenomenon and what additional changes could provide more benefit without major restructuring.

1. ‘Scrape the Barnacles’
Actions
Examples of practical incremental
change which WILL yield
significant results WWW.SALESLABDC.COM/LEADERSHIP
Sales:
Scrap most recap reports
Other Presentations
Mandatory Weekly Status Mtgs
- Review goals from prior week WWW.SALESLABDC.COM/RESOURCES
- What accomplished & why
- What missed & why More on
- Market insights
- Goals for coming week
Leadership, Sales, and Operations Limits on
Management/Admin/Acctg/Etc.:
Change?
Scrap 25% - 50% of interim reports -
add back only ones most requested
Dashboard – Real-time, on-line The
■Cash ■Hours/Payroll$ ■Sales $
■A/R $ ■Productive % ■Sales Vol Hull Speed
■A/P $ ■Agg Vacation ■Cost/Sale
■Net Revenue Lesson
Training on programs & systems
Critical mtgs:F2F; Info only:PCMtg
Production:
Training on equipment
Have Doers write down how they do
things and where THEY need changes
PM all equipment/backup computers Jack Gates
JACK.GATES@SALESLABDC.COM
Completing today’s presentation
Please comment with the best thing you
have learned from this presentation at
http://bit.ly/HS-Best Thank you!

2. Limits on Change? Hull Speed Hull Speed & Change
Is there an effectiveness limit to the Boat designers can calculate the Same is true with organizational change!
changes we can make in an organization maximum speed a hull can travel
to seek improved results? We may think Incremental change is cumulative and
through the water; this speed is governed
that change is hampered only by the eventually becomes ineffective or
by the laws of physics. Here’s how:
boundaries of innovation and creativity - destructive.
but that's not the case. An organization Hull displaces water (hole in water) e.g., Reduced production staffing =
can get to a point where the incremental reduced volume; sales can only deliver
change will have virtually no effect at Bow pushes water aside (bow wave) based on the organization’s reduced
all. To better understand why, let’s talk After ‘hole in water’ passes, water production capacity - to flex to old
about change in an organization. rushes back in (stern wave/wake) levels requires modification/
Why Change? restructuring (subcontracting) at reduced
Max speed reached when both waves margins
▲ Pain converge
▲ Competition
▲ Decrease in Volume (sales) EXERCISE:
▲ Decline in Revenue Once it reaches max hull speed the boat From your experience, what examples
▲ New Technology can not go faster – the bow & stern do you have about ‘Hull Speed’ of
▲ Shift in Market waves are actually ‘gripping’ the hull change?
and holding it in the water (this is why a
How Change?
boat stays on the side of a whirlpool &
▲ More advertising
does not fall in) - - no amount of power
▲ Redesign product or service
or sail can increase its speed
▲ Sales push
▲ New Staff (industry hot shot)
Can’t increase speed unless modify
▲ Cut prices
hull which results in trade-offs
▲ Cut expenses Any Observable Trends????
Implicit Assumptions on Change Smaller/lighter hull (less
displacement) >> less cargo capacity EXERCISE:
◘ Reduced organization can do same
work with fewer staff & resources Split hull (catamaran) two smaller On the above examples, what changes
◘ Institutional knowledge remains hulls >> less stability (not major mods/restructure) could give
accessible more traction for changes?
Raise hull out of water
◘ Remaining workers have required skill (hydrofoil) >> less cargo, stability,
& training AND can absorb the work maneuverability
◘ Existing process & procedure will
continue to function efficiently
◘ Status Quo – except for headcount
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