The Walton Group, Inc.

Advisors to senior management on matters of strategic importance.

 

We are seasoned executives who have successfully served CEO’s and corporate leadership teams in designing breakthrough strategies, dynamic organizations, and effective operating processes that accelerate profitable business growth.

Macro vs. Micro Optimization

Traffic systems, lights, routes, etc.. are all designed based on the idea that people will follow traffic rules. And, if we all followed those rules, I suspect traffic would rarely be a problem.

But we don't. At least not all of us. And if only a few of us break the rules the consequences for everyone else will be small. And the advantage to those few rule breakers is HUGE!

After all, if just a few decide to pursue what they want at the expense of others (in this case speeding, cutting in line, etc...) they can get a huge personal advantage.

But here is where things get interesting...

When everyone else realizes that they are being "gamed" by a few, they will begin to adopt the same behavior. At the point where enough people are all seeking self-optimization the entire system breaks down. Now we are driving too fast to match light patterns, we are crowding exits, we are cutting in line, and everyone loses!

The same thing happens in business.

I seek to optimize the way my department works.

Generally for good reasons. But not always.

I want to do the best job I can, add as much value, support my team, or perhaps avoid conflict, reduce work stress, etc...

But sometimes my best process makes someone else's job more difficult. I squander the advantage I gain for the group by breaking another part of the process. Micro-optimization!

This happens when finance imposes extra process for expense reimbursement to simplify their data entry process. When sales uses extra discounts to win business with less effort. Whenever the answer to the question is, "that's policy!"

Better is macro-optimization.

Macro-optimization is when we subordinate what we want for ourselves as individuals to gain something better for ourselves as a whole.

But to do that, we need to get really good at seeing the world from others points of view. And generally we are not very good at doing that.

Challenge: Try intentionally seeing the world through the eyes of someone you work closely with in business. Ask yourself, "What part of their job could I make easier and more effective by changing how I work?"

Then do it.

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