The rarest of enterprise attributes


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The rarest of enterprise attributes

  1. 1. The Rarest of Enterprise Attributes: The Keen Sense of the Obvious<br />6. MAY 2010 | POSTED IN NUUKO OPEN BLOG | BY DOUG PORETZ<br />There is an expression I find myself using from time-to-time to which most people react with a little laughter or shrug. When I hear someone say something that cuts right through to the core of a problem and presents a clear, intuitive approach that you know in your gut is totally correct, I say: “Keen sense of the obvious.”<br />Other people’s reaction of laughing comes because they think I am making a clever put-down of the idea or the person who offered it. After all, if it’s obvious, there’s nothing to it – no great achievement. Right? Nothing can be further from the truth. You don’t really see a keen sense of the obvious very often. In fact, I think it is way too rare.<br />Many enterprises seem to be engaged in a mad rush to the complicated. It’s comparable but not as obvious as this classically over-complicated classic Rube Goldberg cartoon showing a toothpaste application invention. I’m never surprised to discover such over-complicated approaches accepted by enterprises as Standard Operating Procedure. Take a look at your own enterprise. You might find some over-complicated processes and rationalization.<br />For twenty years or so, I focused on helping public companies develop and implement the strategy for their communications to investors. Every quarter, the C-Suite goes through what can be described as The Crafting Of The Earnings Release. This often starts when the CFO distributes the preliminary P&L and balance sheet. That’s usually followed by a meeting (real or virtual) of a small team that discusses what the release should say. What the lead should be. Where do you put the really bad news or the big home run? The lawyers bring a menu of caveats and attempt to parse every sentence so that the release would eventually be about as far from understandable as possible, which, of course, is counter-productive to their goal of making sure the release doesn’t mislead. The operating execs bring either their alibis of why they didn’t do so well; or maybe they bring their exaggerations about why they did better than anticipated. The CFO stresses the importance of an accounting issue and how it impacted results. The marketing people chime-in about how the positioning of the company’s products and services must be defended and even advanced. This process of telling the truth and being transparent becomes a very complicated process, resulting in a complicated release, to say nothing about creating a legacy of information that must be referenced in the next release.<br />Earnings announcements are a world-class example of over-complicating things. Sales were up or down for a variety of reasons with varying impact, and margins were higher or lower also because of a number of reasons. But how many earnings releases are written to explain the quarterly results in such straightforward terms? It’s as if Rube Goldberg wrote them. Why? I don’t think it’s because there’s a defined desire to over-complicate things; I believe that desire becomes infused into an enterprise’s value.<br />I’m not sure why or how that happens, but I do have a theory of sorts. Procedures and processes and standards are usually initiated for legitimate reasons. Structures are built. Patterns are established. After a while, they become the status quo. And then after a little while more, the status quo becomes outdated, but not replaced. The negative impact that emerges as a result does not appear as a spike; rather, the problems from using the status quo too long emerge in small increments over time. So, the status quo gets tweaked and rationalized, and as that happens, formerly intuitive solutions transform into institutionalized over-complicated and counter-productive processes. Rather than getting killed as the status quo gradually equates more and more to inefficiency, it gets infused into the enterprise culture. And that, in my opinion, is how a keen sense of the obvious becomes such a rare asset within an enterprise.<br />