In the business world, optimisation is the holy grail. It’s something everybody wants. And if you sell optimisation solutions, finding people who want to talk to you isn’t all that difficult.
Optimisation is the business equivalent of the advertisements for “perfect abs”, “beach body ready”, and the “look 20 years younger miracle cream” all rolled into one.
Most businesses will give the time of day to someone who promises to squeeze some extra bottom line profits out of their existing operations through becoming more efficient, cutting costs, and getting people producing more output for every hour they work.
Except there’s a problem with optimisation.
A big problem.
A big problem that the “optimisation solutions” people won’t tell you. (And that goes double if the solution is a tech platform of some sort.)
You see, it’s entirely possible to optimise your marketing, for example, while knackering your sales efforts.
Or to optimise the resource requirements in your contact centre while cheesing off every customer you have.
Or to optimise your supply chain costs while getting the reputation as a supplier who never delivers on time with your customers.
I’d go so far as to argue that it’s almost impossible to optimise a single aspect of company operations, and for that to result in a net positive bottom line return across the business.
I mean, I have seen it occasionally – usually when the manager of the department being optimised was epically incompetent at their job – but the odds are very much against it.
You need to take a company-wide view to optimise the bottom line, not a departmental-level view.
Sometimes optimisation means doing nothing
One of the many issues I have with the current tsunami of AI-powered optimisation solutions flooding the market – apart from the general level of grift in the sector and the fact that they all seem designed to foster an unhealthy level of co-dependency with the solution provider – is that there’s an assumption, often unspoken, that optimisation means taking what you do now and doing it more cheaply.
I’m not saying that’s never the answer. Sometimes it is. But it shouldn’t be the default setting – sometimes the answer is to do nothing at all, not to do what you do now more cheaply.
On the flip-side, sometimes the push is to get more for less – that is, to squeeze more output per hour from the current cost base.
And occasionally that’s the right answer too. But that’s not a foregone conclusion either.
An old boss of mine used to say that the art of change management wasn’t in knowing what needed to change. It was in knowing which elements you should leave alone, exactly as they are.
So whether you’re trying to do what you do now, but cheaper, or trying to get more for less, without realising it you’re already trapped in a mindset which is unlikely to give you the best bottom line result for your organisation.
And you can shift those odds by several orders of magnitude in a negative direction if you try to optimise a single department, or a single function, rather than operating at a company-wide level.
“War – what is it good for? Absolutely nothing.”
Edwin Starr sang that line in his anti-war classic song “War” back in 1970.
But the language of optimisation is often expressed in war-like terms. And they are usually good for absolutely nothing too.
We have to “beat the enemy” of inefficiency. We have to “win the battle to lower our costs”. We have to “take no prisoners”. We have to “fight them on the beaches” to stop anyone getting in the way of our optimisation programme – even if it’s people who care about the business raising reasonable-enough concerns.
Sports metaphors are also often trotted out to justify unhelpful behaviours in an optimisation programme. We need to “carry the ball over the line”, or “knock our cost savings out of the park.”
All of these metaphors are unhelpful at the best of times, but they’re especially unhelpful in the context of trying to optimise your organisation because they all presuppose there’s an activity taking place which needs to happen faster, quicker, better, or more cost-effectively.
That’s what “winning the battle” or “putting the ball in the back of the net” looks like.
Where war metaphors and sports metaphors fall down is that there is a simple, one dimensional, pre-defined objective where everyone already knows the answer.
While sport is like that – you either score a goal or you don’t – very few businesses operate in a simple, one dimensional, pre-defined objective like sports does.
Yet, when it comes to optimising business performance, 95%+ of the time, the people involved in the process pretend that a simple, one dimensional, pre-defined objective is exactly what they’re dealing with.
That’s where the problems start…
…closely followed by a phase I like to call “solving one problem but creating an equal of bigger one in its place as a consequence”…
…which, in turn, is followed by a phase in which everyone tries to work out why they’re still making losses on the bottom line even though they spent £1million to “optimise the business”.
If you’re serious about optimising your business performance, and thereby boosting your bottom line, you need to acknowledge three important truths:
- Trying to optimise a single department in isolation is a route to disaster.
- To optimise the organisation as a whole, some departments cannot be fully optimised.
- The best optimisation solution often means doing nothing at all, not doing what you do now faster, better or cheaper.
A practical example
There’s a much better way to think about how you optimise your organisation.
I’ll explain more in a moment, but first go and watch this video (you only need to watch the first 30 seconds to get the point I’m about to make, but the whole thing is worth a watch, for reasons we’ll come on to in a moment).
I’d particularly like you to focus on the guy with the cymbals.
As you’ll notice, he does absolutely nothing for the first 28 seconds. You can listen as hard as you like to that track, but there are no cymbals being played until almost half-a-minute in.
And even when the cymbal player gets going, there’s just a bit of gentle, rhythmic sounds for a while. If I hadn’t asked you to concentrate on what the cymbal player was up to, you probably wouldn’t have noticed them.
No doubt some tech bro or tech gal would count that as a potential optimisation their AI-powered tech platform could deliver – “You’re paying a full salary to someone who does nothing at all when they should be clanging those cymbals together on every beat, and getting more output from your current level of resources. Either that, or you should fire the cymbal player because you obviously don’t need them.”
Of course, that’s nonsense. Although, in my defence, that level of nonsense is a fairly representative of the level of nonsense in the average tech platform pitch these days.
Optimising what the cymbal player does in isolation would make this, or any other, piece of music unlistenable.
Imagine every instrument in an orchestra playing at full pelt the whole time. It would be the worst listening experience you could think off.
And it’s the same in your business. If the marketing department optimises what they do at the expense of every other department, the sales department does the same, the operations department does likewise, and so on, you don’t end up with a well-ordered optimised business with tip-top bottom line results – you end up with a chaotic business heading for the bankruptcy courts.
That’s why optimising overall bottom line results for the organisation as a whole means some areas of the organisation need to run sub-optimally.
Like the cymbal player, sometimes they just need to sit around doing nothing.
But when you need them, you need them
The temptation is to regard costs like the cymbal player’s salary as unnecessary, and eliminate them.
However, a bit like whoever’s decision it was to run Heathrow Airport with just a single source of electric power, even if that’s possible some of the time, it isn’t possible all of the time.
The cymbals in this piece – technically called the Galop Infernal from Offenbach’s opera “Orpheus in the Underworld” but known to most of us as “the can-can music” – play two roles.
For some of the piece, they merely provide part of the rhythmic structure. That’s what they’re doing between about 00:28 and 00:40.
And in other sections, the cymbals are bringing drama and emphasis, as they do at about 00:42 and, most notably, in the climax at the end.
But at about 01:10 the cymbals abruptly stop again and the cymbal player is back to not being optimised…at least not in the way tech bros and tech gals think they should be.
Now, there’s a good reason for that. The section from 01:10 is led by the wind section, which plays very softly at first. Too much cymbal crashing would drown out the delicate flutes and oboes, so Jacques Offenbach took the wise route and, rather than optimising the cymbals, made sure they had no notes to play in that section at all.
However, as the music swells, and the drama builds, the cymbals come back on again at about 01:28 to accentuate the more forceful passage that follows.
So now we’re about a minute-and-a-half in and the cymbal player has only been working for about one-third of the time.
For someone with an AI-powered business optimisation platform, that looks like a gimme for cost reduction.
Optimisation happens to the whole, not the parts
This is the difference between a department-level view of the world and an organisation-level view.
You can optimise the cymbal player in isolation and remove a cost you only use one-third of the time in the first 90 seconds, so can’t presumably be all that important.
Or you can “get more output for the same cost” by making the cymbal player work all the time, at the expense of most of the audience walking out after the first few minutes.
Either of those would be typical department-level views of the world.
At the organisation-level view, you realise how important the cymbal player is to delivering “The Galop Infernal”, especially in those sections where you need to heighten the drama and the impact of the music.
It wouldn’t be the same with a kazoo, no matter how much cheaper that was.
However, the real reason you need to optimise at the organisation level is that this is the only place where meaningful trade-offs can be made.
For example, what if you could make the marketing department “more efficient” in the sense that they generated more leads for the same cost, but doing so made the sales department less efficient because the quality of the leads was lower.
While there are times you might take a different view for other reasons, from a bottom line results point of view, in general you’d want a maximally efficient sales team, especially in B2B sales where they tend to be an expensive and scarce resource.
At board level you can make a decision to run your marketing department “less efficiently” because there’s a bigger prize here – the efficiency of your sales team.
At the marketing manager’s level, they’ll just optimise their own department, and expect a bonus from finding more and more leads for the same cost you had before. It’s not their problem if doing so makes the sales department less efficient.
That, in essence, is how expensive business optimisation programmes end up achieving much less than they promised…and often making a business worse-off after implementing the programme than it was beforehand.
Whether that’s a marketing manager in search for glory or a senior team who thinks “optimising everything” is essential for business success, it’s easy to make things much, much worse while claiming to be pursing the objective of making things better.
That’s why knowing what needs to change and what needs to be left well alone is for me, as it was for my old boss, the…erm…cymbal of success.
If you need a reminder, just remember the cymbal player in “The Galop Infernal”.
The composer’s and the conductor’s jobs are to optimise the whole piece for the audience’s pleasure, even though some parts of the orchestra are “inefficient”. Not least the cymbal player who is only producing at maximum volume for about 3 seconds in the entire piece.
If you think about optimising your business for your customers’ pleasure, even if that means sort parts of your business run “sub-optimally”, you won’t go far wrong.