Advice Line | Bob Lewis » Balancing strategic and tactical improvements

January 28, 2008 | Comments: (0)

Balancing strategic and tactical improvements

TAGS: General

Dear Bob ...

My current boss has asked me to undertake an extensive review of organizational information practices, with an eye to (1) understanding how the business works, and (2) seeing what can be done to improve our practices.

So far, I've documented about 100 requests and suggestions for improvements from staff in the various business units, and to my mind, the next obvious step is to sit down, prioritize which tasks are most important, and just start addressing them.

Instead, my boss wants me to identify broader strategies, establish business drivers and benefits of pursuing these strategies, and them submit these to the next management level up for approval.

To my mind, this smacks of retrospective justification. If there are perceived problems out there, why do we need a strategy before we can fix them?

Or is this a case of me seeing the trees instead of the forest?

- Prioritizer

Dear Prioritizer ...

I think you and your boss are each about half right.

One reason to not just "do the list" is that even if every idea for improvement is a good idea taken in isolation, it's doubtful they will all mesh harmoniously if you're able to find a way to put them all into practice.

One of the basic, unexpected principles of design is that in order to optimize the whole you have to sub-optimize the parts. If you have a list of one hundred improvements it's just about certain that many of them ... probably most of them ... have a local focus. That means they are intended to improve a part, which will sometimes happen at the expense of the whole.

If this point isn't clear, read "Optimizing the organization," (Keep the Joint Running, 10/27/2003).

The other big reason for not just diving into the list is that when a company allocates too much of its available staff to work on a large list of small stuff, there might not be enough left to take care of what's most important.

One reason you are right is the Edison Ratio: Genius (and success in general) comes from one percent inspiration and ninety-nine percent perspiration. In context it means having big, strategic ideas is often less important than sweating the details.

The other reason you are right is that small, focused efforts have little risk of failure and deliver business value quickly. It's the big strategic ones that fail often and don't deliver any value for long periods of time.

There's a way out of this collision of incompatible rightnesses. It is (don't sneer!) a magic quadrant analysis.

The vertical axis represents cost and risk - the reasons why not. The horizontal axis represents benefit and impact - the reasons to proceed. Here's how you label and handle each quadrant:

* Upper left (high cost/risk, low benefit/impact): Kill. There's no point to something that costs a lot, has a high likelihood of failure, and won't accomplish much that is useful.

* Lower left (low cost/risk, low benefit/impact): Delegate or re-scope. Most of your items probably live in this quadrant. If they really are isolated, small efforts that are local in scope, beneficial in a minor way, but won't cost much and are pretty much sure things, delegate their execution to the area they effect and forget about them. The good news about these is that they accumulate. A few thousand small, seemingly unimportant improvements turn into a big deal after awhile.

Others in the same quadrant will turn out to be linked in some way to other items either in this quadrant or others. By consolidating them, you'll eliminate redundant work, avoid incompatible outcomes in related or linked efforts, and achieve more important results. This, more or less, is what your boss is telling you to do.

* Lower right (low cost/risk, high benefit/impact): Full steam ahead. There aren't a lot of these, and they're the best of all possible worlds. You spend little, risk little, and get a lot in return. It is possible you'll have some of these on your list. If so, get them started as fast as you can.

* Upper right (high cost/risk, high benefit/impact): Select and manage. Companies can't undertake too many high-cost, high-risk, high benefit/impact initiatives at the same time. They can't - companies can't absorb that much change all at once. And, each effort of this size and scope requires significant executive oversight or they will fail. Companies have only a limited supply of executive oversight.

My best advice, then, is to find the linkages that almost certainly connect many of the items on the list, and then to package them together in the form of strategic initiatives, so that when your company implements them the results will fit together.

Find a way to delegate the rest so they are handled quietly and locally.

That gives your company the best of both worlds.

- Bob

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Posted by Bob Lewis on January 28, 2008 09:56 AM

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