Thinking Dynamically

If you’re asked to do cost reduction, before doing that work, ask for objective evidence that the work to grow the top line is adequately staffed. You can’t secure your company’s future through cost reduction, so before you spend time and effort to grow the bottom line, make sure the work to grow the top line is more than fully staffed. Without top-line growth, cost reduction is nothing more than a race to the bottom.

If you’re asked to do more of what was done last time, before doing that work, look back and plot how that line of goodness has improved over time. If the goodness over time is flat (it hasn’t increased), the technology is mature, there’s nothing left, and you should improve something else (a new line of goodness).  If the goodness continues to increase over time, ask customers if it’s already good enough.  Do this by asking if they’d pay more for more goodness. If they won’t pay more, it’s already good enough. Stop work on that tired, old line of goodness and work on a new one. If goodness over time is still increasing and customers will pay more, teach someone else how to improve that line of goodness so you can establish the next line of goodness which will be needed when the old one gets tired.

If you’re asked to make your product do more, before doing that work, figure out if the planet will be better off if your product does more. If the planet will frown if your product does more, make your product do less with far less.  In that way, your customers will get a bit less, but they’ll use far fewer resources and the planet will smile. And when the planet smiles, so will the stockholders of the company that provides less with far less.

If you’re asked to improve a specific line of goodness, before doing that work, look to see if competitive technologies are also improving on that same line of goodness.  If their improvement slope is steeper than yours, you will be overtaken. Find a new line of goodness to improve, or buy the dominant company in that’s making progress with the competitive technology. Don’t wait, or sooner rather than later, they’ll buy you.

If you’re asked to make your product do more, before doing that work, look at the byproducts that will increase and how that relates to the regulatory standards. If those nasty byproducts are (or will be) regulated, future improvements will be blocked by regulatory limits.  You can argue about when those limits will be a problem, but you can’t argue that those regulatory limits will ultimately take you out by the knees. It’s a tough pill to swallow, but it’s time to look to a new technology because your existing one will soon be outlawed.

Everything changes. Nothing is static. Technologies get better, then it’s difficult to make the next improvement. Competitors get better, then it’s difficult to be better than them. Environmental constraints get tighter, then you’re legally blocked from improvements that violate those constraints. Last year’s solutions become obsolete. Last year’s analysis tools become obsolete. Last year’s best materials are no longer best. And last year’s manufacturing best processes are no longer best. That’s just how it works.

Before you allocate precious resources to do what you did last time, spend a little time to analyze the situation in a dynamic sense. What changed since last time? Has the regulatory environment changed? Have competitors made improvements? Have new competitors emerged with new technologies? Has your legacy technology run out of gas or does it still have legs? Have new tools come of age and who is using them?

Everything has a half-life – technologies, products, services, tools, processes, business models, and people. When new things are come to be, the only thing you can guarantee is that time will run out and they will run their course. Even if your business model has been successful, it has a half-life and it will die.

Success causes us to think statically, but the universe behaves dynamically. The trick is to use the resources created by our success to sow the seeds that must grow into the solutions of an uncertain future. The best time to plant a tree was fifteen years ago, and the next best time to plant one is today.

Image credit — Matthew Dillon

Comments are closed.

Mike Shipulski Mike Shipulski
Subscribe via Email

Enter your email address:

Delivered by FeedBurner