Tuesday, December 17, 2013

Strategic Planning Analogy #517: Dirty Rice

Today I made myself a batch of Dirty Rice for lunch. As I was eating it, I pondered the irony of it all. Dirty Rice was originally developed in New Orleans as a way for impoverished people and struggling restaurants to stretch their food. The idea was to take the scrapings of leftover bits from the pots and pans of the prior meals and stir it into rice. Suddenly you had a meal made out of food scraps that would have normally been thrown away.

Yet I made my Dirty Rice out of fresh ingredients. Rather than being made out of leftovers, my fresh dirty rice created leftovers.

This seems to happen a lot in cooking. Foods originally created to help struggling people survive somehow eventually become gourmet food for the rich.

For example, the French are known for their gourmet cooking using great sauces. The origin, however, came out of poverty. At one time, there were large shortages of food in France. To make the meager portions stretch to feed an entire family, they were covered in sauces. The sauces made a little food look like a lot of food. Now, people who can afford as much food as they want pay premium prices at French restaurants to get food based on sauces designed to stretch food for the poor.

In many warm climates, the gourmet food tends to be rather spicy. This was because poor people in hot climates had a difficult time preserving their foods. The heat would make the food start to smell rancid. So to cover up the bad smell, they would cover the food with hot spices. Today, one of the top gourmet choices in the UK is spicy food from India. The climate and food preservation in the UK certainly does not require the spicy cover-up, but they love it nevertheless.

I suppose that someday in the future the microwave will be made obsolete by newer technology. Yet, I’ll bet there will be gourmet restaurants in the future specializing in the obsolete art of microwave cooking. Upscale microwave restaurants will be seen as reviving a lost art in gourmet cooking.

There is usually a reason why certain products, traditions and processes exist. Dirty Rice comes out of a tradition of stretching kitchen scraps. French sauces come out a tradition of making meager portions large enough to feed a family. Spicy foods come out of a tradition of covering up rancid smells and tastes.

Over time, many of those reasons for existence go away. Improved economies, food production, food preservation and other factors have made the original need for dirty rice, French sauces and spicy foods no longer as necessary. Yet the traditions live on. Ironically, the original need for these products (poverty) is not the driving force anymore. They became gourmet products for the rich of the world.
Similarly, businesses are filled with lots of products, processes and traditions which are no longer essential. Sure, there were good reasons for these products, processes and traditions when they were first initiated. But times change. The reasons for continuing down these traditional paths may no longer exist.

Just as silly as it was for me to use expensive fresh ingredients to make a recipe designed to use up cheap table scraps, it is silly for companies to continue old so-called “cost-cutting” practices which over time have become inefficient and expensive. It’s time to re-think those traditions.

The principle here is that change impacts relevancy. Products and processes which were highly relevant and useful at one point in time usually become obsolete as times change. We may continue the practices of the past with no understanding of what caused those practices. They become part of the fabric of “how things get done” without being questioned.

Yet, if we questioned these practices, we might discover that change has rendered them to be counterproductive to success. New and superior approaches may now exist. Just because something was the right thing to do in the past does not mean it should be done today. One of the keys to strategic success is knowing when to abandon the past to embrace the future. This includes a look at internal processes and structures.

Different Economy
Consider the fact that the world has largely moved from a production-based economy to a knowledge-based economy. Yet many knowledge-based companies are still using internal processes and structures designed during the production era.

Are those processes still relevant? Are there new processes and structures more suitable to a knowledge-based business? To use the analogy, are we trying to serve the rich with food originally designed for the poor? When is the last time you challenged the way things get done to see if they are best suited for a knowledge-based era?

For example, production-based businesses tend to centralize more power at the top, whereas knowledge-based businesses have often found value in pushing power far lower in the organization. This is just one of many assumptions to look at in how things get done.

Different Technology
Back when data was scarce and communication difficult, companies developed large infrastructures of middle-management. Their primary role was to gather information and communicate it to the proper people. At the time, middle-management was the most efficient way to do this.

Now, we have amazing new technologies to gather data and communicate it. Smartphones and tablets are more efficient ways to do what middle management used to do. Is middle management even relevant anymore? Are traditional in-person meetings still relevant? Are traditional offices still relevant? When is the last time you challenged tradition to see if new technology has rendered that process obsolete?

New Visionaries
Fortunately, there are people out their helping us answer these questions. One that comes to mind is Gary Hamel. He is part of an organization called The MIX, which stands for Management Innovation eXchange. This organization tries to tap into the business world’s knowledge base to find out what internal processes and structures are best for the changing business environment.

And then there are programs like six-sigma, lean, and a host of innovation tools to help companies get rid of obsolete processes and become more relevant for the times.

There are also plenty of leading-edge companies out there trying unconventional approaches. They are worthy of examination for ideas.

One of the major roles of strategic planning is to help companies become relevant in an ever-changing world. Often, that focus is primarily external—deciding who are the relevant consumers to target and what innovative, new product/service should be offered. Yet, the external adaption to change is only part of the battle. There are also internal considerations. We need to make should that our internal processes and structures are also relevant in the changing world. Do we have the right organizational structure? Do we have the right internal work rules? Is power located in the right places? Is modern technology being optimized? How should people be compensated?

Getting the internals right may give you more of a competitive edge than getting the externals right. They are worthy of serious concern as part of your strategic planning process.

Next time you eat in a fancy gourmet restaurant, remember the irony that the food eaten by the rich often was designed by those in poverty. Use it as a reminder to look at your internal processes, to see if they are equally out of touch with their original intent. Then change your processes to get them relevant to the future.

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