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9/4/2001
05:47 PM
Lou Bertin
Lou Bertin
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The Observer: A Prescription for Optimization

With budgets tighter than ever, and managers doing their best to keep their heads down, few organizations are willing to revisit what they do, how they do it, and why (and with whom) they do business. But, says Lou Bertin, it's still the smartest thing to do.

I needed go no further than the recent writings of my friends Bob Evans and Stephanie Stahl to find inspiration for this week's column. And when next you see them, thank them, because they spared you a sermonette on Alan Greenspan and my musings on how productivity ought be measured.

In the Sept. 3 edition of InformationWeek, Steph wrote about vulnerability and Bob indignantly scored various research organizations for their definitions of "Collaborative Business," all of which he found lacking.

First to Steph's point. Here's her opening paragraph, with deletions of the same two words in each case: "Chances are that if you're reading this you've probably experienced a XX in your organization at some point in the not-so-distant past (and possibly at a huge cost). Or you've had a XX and have no idea that it happened (or is happening). Or, perhaps, you're about to have a XX."

The XX's in Stephanie's editorial on vulnerability were the term "security breach." I'll submit, however, that if you substitute the term "failure to innovate" you'll come up with an equally accurate--and, for the short term and the long term, more costly--view of organizational vulnerability.

It's easy to see these days why companies aren't too keen on revisiting what they do, how they do it, and why (and with whom) they do business. Budgets are tighter than ever. There's pressure to keep price/earnings ratios solid (read: layoffs). There'll be a need to justify in excruciating detail why spending X amount on IT this year will be different from the X amount spent last year to make the business a dot-com manqu. The bosses just want to keep their heads down, so as not to become fodder fed to the god of price/earnings.

Those all are compelling arguments on the visceral and tactical levels, especially at a time when any company is being challenged to do more with less in the way of human and technical resources.

But the times when companies are being forced to do more with less are precisely those where innovation is the sine qua non of survival at minimum and success at best. These are exactly the days when organizations should be looking over the how, why, and with-whom questions surrounding the operation of their organizations and with a cold eye assessing what does and what doesn't contribute to the optimization of their company.

Which brings me to my pal Mr. Evans' piece on collaborative business and definitions thereof. Having been on the receiving end of Mr. Evans' indignance a few more times than I've cared for, over the past 21 years, I'll not engage in a semantic war with him over definitions of the term.

I will, though, submit that for any organization to engage in collaborative business, it must first remain in business. For that to continue to be the case, in these times enterprises great and small need to be single minded. They need to quit overreacting to the latest three-letter acronym masquerading as a strategy, and need to err on the side of introspection.

In a word, businesses need to optimize. The fundamental question a company should be asking about any new technologies, techniques, or management strategies is "What will this do to optimize my business?" Not my competitors' businesses, not how other companies have benefited, not how the Harvard Business Review theorizes that it will change business. Merely the simple "What will it do to optimize my business?"

My prescription shouldn't be seen, however, as a governor to innovation. Far from it. Innovation needs to be welcomed, regardless of the business and economic environments at play. But it must be innovation aimed at the optimization of the organization. Nothing more and nothing less will do at any time, other than those periods where hysteria overtakes capital markets.

Collaboration is a prerequisite in this economy and Bob has no doubt already sparked a lively debate on this issue. But innovation will continue to be the coin of the realm for as long as business is transacted. Above it all, though, comes enlightened self-interest... the continuing need to optimize.

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