Tuesday, 10 March 2009

Management Speak - Business Optimisation

There is nothing like a bit of management speak to warm the bones during the last throws of winter and the latest little gem to come my way this week was, Business Optimisation.

Business optimisation is the current buzz word among senior leaders seeking to adopt the right strategy during this economic downturn. Essentially, it is about putting in place the measures now that will make the business as strong as possible when the economic climate improves. Intuitively, this makes a lot of sense but what sort of areas are the consultants and strategists looking at?

Organisational Structures
There are many companies at the moment who are announcing widescale redundancies while simultaneously recruiting new staff. In case you are wondering how that circle can be squared the answer is of course - business optimisation. Companies are identifying the roles and associated skills they need to get them through the recession but also those that will provide a springboard as they come out the other side.

Business Workflow and Processes
If the remaining workforce is required to produce more with fewer resources, the workflows and processes need to become more efficient. Many companies are taking the opportunity afforded by a recession to re-engineer their processes and associated workflows.

Cost Management
Harsher economic times leads to a need for better financial husbandry. Finance directors must be having a ball. Their power base invariably increases during a recession as they dictate what the company spends money on and what it doesn't. Discretionary spending is being slashed in favour of essential spending and err, business optimisation.

One HR Director I was speaking with recently was bemused that the only department he hadn't had to reduce headcount in was the marketing department. Clearly, he had not heard of business optimisation! While companies might be reducing their marketing communications spend, a recession also provides an ideal opportunity to focus on developing the core offer of the company, refine the target market and analyse which part of the market is delivering the real, sustainable profits.

Organisational Capability
Companies might be reducing headcount but at the same time they need to make sure they maintain their skills base and capability going forward. They must ensure knowledge is being effectively transferred within the business and their staff are continuing to be developed. This means managers and experts within the business need to become effective coaches as well as the company investing in well targeted training.

You might have picked up a note or two of sarcasm in this article. It's not that I think business optimisation is a bad thing or that the term is inappropriate. My real problem with this being the current focus among many senior leaders and strategists is this - why weren't they focused on these things all along?

Efficient and effective deployment of resources, efficient and effective business processes and workflows, prudent cost management, a strong strategic marketing focus, good knowledge transfer and ensuring the workforce has up-to-date skills are all components of solid business management. Why do we need a recession to put us straight?

Simon Cooper heads up ELC Training Solutions and is the author of the best selling leadership development book, Brilliant Leader.

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