Optimization

Optimization

 

The Win-Won Business Mindset (#6): “Optimization - 4 Areas to Analyze”

The idea of optimization spans a wide spectrum, depending who you ask and under what circumstances. Let’s presume a widely implied consensus that most everything has limitations. Ideally, we want to ensure the limitations we grapple with are managed effectively so we can navigate whatever scarcity we may confront.

Consider some common business challenges and deficiencies: inoperable machinery, idle personnel, slow systems, antiquated workflows, and so on. These are all derivatives of inefficiency that can adversely affect productivity, and ultimately reduce competitiveness. If businesses don’t use their resources or assets wisely, they risk gradual decline or outright failure. This is where optimization enters the picture, and it goes far beyond these baseline examples.

Areas to be consciously aware of:

1) FOCUS - What you direct your attention and resources toward

While not always easy to measure, nothing is achieved without concentrated focus. Direct it wisely, toward goals, outcomes, processes, priorities, etc. Avoid distractions and be aware of forces that divert attention.

2) TIME - A universal measurement

Know where and how your time is being spent. 

3) ENERGY - The fuel of motion

Learn to manage it effectively and know when to dial it up and when to conserve it.

4) RESOURCES (Tangible) - The inputs into product or service lifecycles

These are visible, but sometimes overlooked. Even slight misuse of resources can significantly affect outcomes.

Contemplate a leaking water tap slowly dripping once every 10 seconds. (AI-assisted calculations)

    • Average drip volume:  0.25 millilitres
    • Drips per day:  8,640
    • Drips per year:  3,153,600
    • Total volume for the year:  788,400 millilitres (788 litres or 208 gallons)

(Presuming the average adult drinks about 3 litres of water per day, this is roughly 262 days of drinking water needs)

 

Optimization, when viewed as a strategic mindset, requires weighing and measuring tradeoffs. It's not always about maximizing a measured outcome or solution. For example, spending time with patrons at an outside work event may not boost profitability, but fulfills a deeper aspect or your company’s vision, cultivating personal connection.

Optimization may be the key to unlocking value, uncovering externalities, or revealing unintended consequences. All four areas discussed are significant variables. You can start off by asking the following questions:

  • Are you directing focus to what is most impactful?
  • Are you allocating time appropriately?
  • Are you satisfied with how your energy is being used?
  • Are resources being underutilized or wasted?

In order to understand a business, you must know how all its parts are interconnected. Optimization is critical for a number of reasons: it allows you to consciously recognize tradeoffs and understand how they impact sustainability, productivity, competitiveness, and a host of other variables. Better awareness of these four areas can lead to a more comprehensive framework for measurement and analysis.

 

“The Win-Won Business Mindset” is a series by Win-Won Business Consulting designed to share insights, ideas, and strategies for small businesses and entrepreneurs.

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