Is optimization in the DNA of your Organization's Culture or operates as a part of the firefighting culture?

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Organizational DNA could be defined as the underlying factors that together define an organization’s “personality” and help explain its performance. Organizations are increasingly competing with differentiating capabilities and therefore find themselves in transformation mode, retooling operating models and re-ignite organizational DNA to execute effectively.
Optimized organizations ensure that the resources are leveraged to their best potential to create the unique capabilities. Ideal state optimization results with the concurrent maximization of resource efficiency, effectiveness, and utilization. Creating and sustaining an optimized organization may require extraordinary leadership commitment. It’s also true that every corner of a “typical leadership Benzene ring” in all major corporation’s view optimization differently. However, creating an optimization culture which is embedded in the core value system requires that all these views are communicated to the internal and external stakeholders (read employees, shareholders, media etc).
In today’s competitive and highly networked environment optimization is can be visualized as an outcome of two basic tenets –
  • Digitisation (optimization of processes with tools, automation, robotics)
  • Cost optimization.
I tried putting my not so scientific brain to come up with a broad mathematical formula that could help establish this for any organization. Optimization should be directly proportional to Digitization and inversely proportional to cost and to stabilize the equation we can introduce the constant,  (business metrics).
Optimization = (m) * (Digitization / (Cost) )
Let’s take a simple example –
A giant Fortune 500 corporation has been driving cost optimization for the past several years as a lynchpin of organizational transformation. After spending many years and several million pounds in optimization costs, they realized that whilst they saved much, they lost much as competition came in with digital concepts, optimized product mix, go to market plans and communications. They realized that ROI could have been much better had they invested all the resources in thinking “digital”. Their business metric remains the same margin per transaction, profitability, and costs.
Would we describe this highly transformative organization as a “DNA case” or “firefighting case”? Is it fair to say that Cost Optimization can be unidimensional and more in the firefighting mode whilst long-term profitability with innovation and digitization of processes, tools, techniques a better culture to adopt?
The answer lies somewhere in between - in most cases ability to formulate the long-term strategy of optimization around the four pillars, with the nimbleness to fight fires when they crop up, could be the answer.
The debate on the formula is out in the open. There is no scientific formula but am sure if something like this does come out, would make “thinking optimization” a much simpler problem.
- Siddharth Singh (Vice President - UK & Europe)