Sunday, January 16, 2005

What is OPTIMIZE!tm ?

OPTIMIZE!tm is a methodology, approach and philosophy to enable transformational improvements in operational performance and corporate valuation. The method is simple to understand, yet challenging to implement. NO management-speak or techno-centric jargon. Straight forward words to result in action and measurable improvements.

The breakthrough in the methodology is the result of management and technology consultants seeking the answer to the question of how to successfully implement real-time performance management systems, improve predictability of the project / business outcome and dramatically increase the valuation of an enterprise. OPTIMIZE!tm is the synthesis of over 35 years of operational and consulting experience in high performance enterprises.

The major components of the methodology are:

1. Understanding the fundamentals of Organizational Valuation
2. Implementing a Process Centric Organization
3. Performance Management Model: A dynamic, objective approach
4. An information and technology architecture to enable performance improvement

Organizational Valuation – One of my most remarkable observations is just how little most executives understand about the fundamentals of business valuation. This is a major cause of organizational dysfunction. As a result, performance measurement becomes based upon subjective and personality based criteria.

To be successful, an executive team must have a fundamental knowledge of business valuation. Only then, can leaders drive the processes, activities, organizational inter-dependencies and metrics to improve performance. The result is incentive compensation and performance measurement systems based upon objective criteria. The relationships between shareholders, executives and employees become Win/Win.

Process Centric Organizational Model – A lot of lip service is given in management literature and practice on this topic. Virtually all companies today are organized along traditional bureaucracy, functional, academic oriented models. People go to college and learn about engineering, finance, accounting, law, marketing, computer science, chemistry etc. Organizations tend to be organized in similar, functionally oriented manner.

However, the current model neglects the reason the organization is in business. Organizations exist to serve a Customer. As a result, an effective organizational model and chart needs to be radically re-drawn. As a result, there should only be Four Ciritical Processes, or operational units, reporting into the CEO as follows:

- Marketing: Includes both Product and Corporate Marketing
- Sales
- Product & Service Delivery
- Customer Support

A fifth unit should also report to the CEO, Compliance. One executive needs to be responsible for planning, monitoring and providing feedback to CEO and directly to an Audit Committee on the organization’s degree of adherence and related risks with financial and legal compliance activities. This role should have enterprise focus and lead by a Chief Risk Management Officer or Chief Compliance Officer. Over the long, successful compliance with Sarbanes Oxley will require an enterprise perspective over risk and compliance with all applicable laws and rules.

Any other business funtion exists solely for the purpose of providing value to the processes of designing, selling, delivering and servicing the customer. Objective goal setting and measurement systems need to be implemented to support these functions and measure the respective contribution to enhancing business valuation.

Performance Management Model – Again, many organizations appear to be intimidated by implementing and driving the business with a Performance Management model. Typically, an annual Plan / Budget and loosely coupled sales / executive incentive compensation plans are created. Then, the organization hopes for the best.

The company executives need to understand what creates value and the related strategy. Critical decisions are made on how to invest resources to improve valuation. Goals are set across the Four Critical Processes to result in improvements in performance and valuation. The executives then go through a process of determining specific, actionable and measurable plans to realize the goals. Significant discussion is held across the Four Critical Processes to identify and assess independencies.

The Metrics that drive valuation are understood and goals across the Four Critical Processes are decomposed in order to implement early detection systems to support realization of the goals.

The process of planning and performance is constant, dynamic. The organization can no longer wait until the end of the month or a quarter to assess performance.

Information & Technology Architecture – Most information systems in a company today have emanated from an antiquated, backward looking accounting model. Other major systems supporting areas other than accounting are based on a parochial, functional view of supporting a specific functional requirement. As a result, the business, information and technology infrastructure is cost / result inefficient.

Fortunately, the difficulty and cost of enabling technologies are falling dramatically. Organizations are capable of creating a Management and Technology Road Map to support the basic enterprise mission of increasing valuation and enabling a truly Process Centric Organizational Model.

Copyright 2005 Bristen, Inc - All rights reserved. Any use or reproduction without express written permission is prohibited.

Sunday, January 09, 2005

Why the Need for OPTIMIZE!tm ?

Over the past 10 years, there have been a number of technology and management fads purporting to be THE magic elixir to cure whatever ails the organization.

We have experienced an explosion in the development, promotion and use of technologies and management techniques. Mission statements, building blocks, frameworks and blueprints are all common place today. We manage in a minute, move our cheese, leap chasms, exploit our digits, explore ecosystems, lead revolutions and reinvent ourselves. We empower our employees, conduct 360 degree reviews, and profile personalities. We MRP, ERP, SC, CRM, BPR, ISO, TQM, EAI, XML, Portal, MIC, KEY and MOUSE’d ourselves incessantly.

In many organizations, decisive leadership is perceived as autocratic.

Political correctness inside the organizational walls is more important than what is accomplished in front of the customers. The need to build consensus is blown out of proportion and gives way to a “Community-building” management style.

The result: slow decision making, unclear accountability, organizational charts based upon functions & personality based silos and a lack of customer responsiveness. The cost structure of the organization is obese and uncompetitive.

Over the past 10 years the significance of corporate Politics has overcome the necessity for Performance. In particular, US based businesses are at a tipping point in their relevance to the global economy.

OPTIMIZE!tm is a straightforward and aggressive methodology to dramatically improve an organization’s focus, communication and most importantly BUSINESS PERFORMANCE. The methodology is as appropriate for start-ups, emerging growth organizations as it is for a turn-around or a flat growth enterprise.

Business Performance optimization is not a quick fix. The path is challenging, with many difficult decisions to be made over a 6 to 24 month period of time.

Copyright 2005 Bristen, Inc - All rights reserved. Any use or reproduction without express written permission is prohibited.

Tuesday, January 04, 2005


Traditional business models are under significant cost pressure from offshoreing, the Financial Elite are hyping ill-logical business plans to artificially inflate stock prices and the 'management & technolgy' trends over the past 10 years have created a lot vapor and NO business results.

Why optimize? YOU have to! Your business survival, your job is at risk.

OPTIMIZE!tm is a performance based approach to the planning, execution and performance management of a business.

Copyright 2004 Bristen, Inc - All rights reserved

Competitive Threats: Consolidation & The Financial Elite

Competitive Threats: Consolidation & The Financial Elite

The sources of competitive threats are numerous, varied and complex. The threats are changing constantly. However, there are a number of emerging, long-term trends which cannot be ignored.

Corporate consolidation is an undeniable trend in business. The big are getting bigger. The competitive implications are significant. You must understand and respond to the competitive realties. Grow or die.

The economic fundamentals behind industry consolidation are to realize greater share and influence over the market. Another major benefit is to create organizational synergies and realize a more efficient cost structure. These are legitimate economic drivers to create value.

Over the short-term, the effects on the market and customer base are often realized. Marketers are effective at projecting an image of a more powerful and responsive entity. The new organization is going to expand its product offering, improve customer service and lower pricing. The result: a strong image is projected, prices are lowered and promises made.

Frequently, over a longer term period, the intended economic benefits are never realized. The agendas of the financial elite prevail. The financial elite are the large shareholders, top executives, law firms and the investment banking community. Their motivation is to buy low, sell high and make millions on transaction fees having little to do with creating and realizing the fundamental value in the corporation.

For awhile, who was not drawn to the purported success and customer value created from WorldCom, Enron and Global Crossing? In the end, only the Financial Elite realized value, while many hurt.

In December 2004, a shareholder lawsuit was filed against Krispy Kreme for allegedly double shipping products to grocers AND having knowledge of business slowdown long before issuing a profit warning. Again, pressure from the Financial Elite and another early test for the Sarbanes Oxley legislation. But what is / was the impact on this market?

Historically, the energy behind marketing was product oriented. Over the past decade, a significant aspect of marketing has related to hype and promoting corporate value in the stock market.

The result: competing in the capital markets is as important as competing in the customer / product markets.

The big are getting bigger. Their market influence is higher; their cost structure will be lower. How is your business reacting to these trends? Does your management team understand the fundamentals of Business Valuation? Do you have an executable strategy in place focusing resources to enable you to compete in this environment?

OPTIMIZE!tm is a performance based approach to the planning, execution and performance management of a business.

Copyright 2004 Bristen, Inc - All rights reserved

Monday, January 03, 2005

Competitive Threats: The Movement Offshore

“Exceptional strategy has more to do about being Right, than being smart”

The fundamental beliefs surrounding the approach to managing a business is under attack. Businesses are engaged in an aggressive, relentless, competitive battle. SURVIVAL as a corporation, an entrepreneur, an executive and as an employee is at stake. The methods of executing business must be transformed.
You must … OPTIMIZE!tm ... your approach to managing your organization.

Competitive Threats: The Movement Offshore

The sources of competitive threats are numerous, varied and complex. The threats are changing constantly. However, there are a number of emerging, long-term trends which cannot be ignored.

During the 70’s and 80’s, the push to move manufacturing capability and facilities offshore accelerated. At first, the dramatically lower cost of land and wages were the primary motivation. During this period, useful information technologies emerged causing improved operating efficiency and lower cost structures. Large international companies successfully manufactured commodity-like products, with no variability in features and produced them on a massive scale. The result: the manufacturing infrastructure and millions of jobs supporting that infrastructure were reallocated from highly-developed countries to emerging nations.

During the 90’s, developments in information technology (networks, rapid / flexible software development tools and the ‘internet’) accelerated the cost advantage and capacity of offshore manufacturing further. In addition, a ‘component-based technology’ manufacturing approach’ gained dramatic momentum. Product designers started using interchangeable components across product lines. The complexity of manufacturing a variable product line decreased, reducing the cost structures yet again.

The advances in manufacturing methods enabled an increase in the number of product features and variability offshore manufactures could provide. The manufacturing cost advantages became available to a larger number of organizations. Previously, these companies competed on the basis of product differentiation. The competitive playing field changed dramatically as smaller, nimble, companies were now able to take advantage of the lower manufacturing costs structures available offshore. Product pricing has able to stay constant, or even decline.

The recent technology explosion has enabled the re-allocation of technology development, customer call centers and back-office (clerical, administrative, support roles) business processes overseas. Business process outsourcing is driving overhead cost structures down and is a very real competitive threat to all companies and individual jobs.
The result: the way we develop, manufacture, fulfill and now administer our business has forever changed.

The Movement Offshore is providing a strategic cost advantage. Has your approach to developing strategy and executing your business changed to specifically face this competition? How will the cost structure of your organization compete? Do you have the reporting and technology infrastructure to drive down your cost structure?
OPTIMIZE!tm is a performance based approach to the planning, execution and performance management of a business.
Copyright 2004 Bristen, Inc - All rights reserved

Sunday, January 02, 2005

Executive Accountability

To succeed, organizations must rapidly evolve away from 'Personality-based' to a 'Performance-based' approach to managing a company. This is also critical to restoring investor confidence in the stock market and in a company.

Fannie Mae has the opportunity to test these principles. Raines (CEO) and Howard (CFO) were at the helm of an enterprise responsible for one of history's largest accounting mistatements. Both signed certifications required by the implementation of recent SarbOx legislation. Both knew, or should have known, the implications and consequences of the accouting treatment being applied to a certain category of transactions.

The board of Fannie Mae can take a 'Personality-based' approach and allow these powerful political personas to walk away with hefty severance packages. Alternatively, they can 'do the right thing', take a 'Performance-based' approach and save the company, customers and investors tens of millions of dollars.

The SEC and OFHEO can slap the back of the hand or enforce the true intent of the SarbOx to this high profile situation.

OPTIMIZE!tm is a performance based approach to the planning, execution and performance management of a business.