The Y to X tree is one of my favorite tools to teach and use. It is ridiculously simple, deceptively useful and surprisingly powerful.
We start with a reminder about the process equation. (If you missed it, you can read about it here.)
The Y is the outcome. You can’t change the Y without changing at least one X.
So how do you know what to change? Too many times we know what the outcome is that we want to change, but struggle to figure out where to start. That’s where the Y to X Tree comes in. It is a simple tool to help you distill your outcomes into the inputs, which then lets you figure out where to focus your time and energy.
Your Y target is usually high level, and far to big to impact directly. Objectives like “Increase sales revenue 10% this quarter” or “Reduce year over year operating costs 5%” are great examples. Not doing them isn’t an option, but where do you start?
Example #1 – Increasing Profitability
Here is an example of a Y to X tree for a typical business plan.
We start with two goals: Increase Revenue and Decrease Cost of Good Sold (COGS). These two goals are major contributors to profitability.
Following the color patters, you can see that we split Increase Revenue into Price of Labor (year over year) and Labor Productivity. These can be broken down further into several pieces. For instance, Labor Rate and Management Process are key factors in the Price of Labor. You can see similar breakdowns for the COGS goal.
When using the Y to X tree, the whole point is to break down your Y systematically. What are the biggest contributing factors? Those become your level 1 X items. Those are in turn broken down (as a new Y) into level 2 X items. You can continue this loop as many times as needed until you reach a level of manageable items.
Example #2 – Lean Six Sigma
We start with the goal of applying Lean Six Sigma (LSS) Principles in our HR practice.
So what are the biggest contributors to making this goal a reality? Here there are three that have been identified: strong LSS metrics, LSS deployment sessions (a systematic way of generating projects), and a program to certify LSS champions.
We then drill down on the deployment sessions. What makes them work? We need to be able to generate a return on investment measure for the projects we will undertake, we need to have a strong program for certifying green and black belts, we need to understand how many projects we need to generate for green or black belts, and we need a way to track the projects.
“Apply LSS Principles” is a high level goal, and difficult to undertake. How do you change a culture? Our level 2 X items, though, are all easy to manage and should be obtainable in a short amount of time.
Applying Y to X Trees in Your Planning
Think about the goals you have for this year, and which ones strike you as lofty to the point of being unattainable. The Y to X tree gives you a method of breaking those goals down in a logical, systematic way that turns them into actionable plans.
The more often you use them, the more useful they become. You can sketch out the diagram with no tools if needed. Pencil and paper are nice, whiteboards are better, but you can draw them in the dirt with your finger if needed. They are easy to understand and quickly produce meaningful targets. With a little practice, they will become on of the most useful tools in your kit.
So, what are your “too big to chew” goals?