A bundle of routines
March 1, 2015
One way to view a company is as a bundle of routines.
What does that mean? It means that it’s possible to view a company not as people, or as real estate, or as a brand, or even as the products it produces.
Instead, any company can be viewed as a set of steps that are undertaken - probably hundreds of thousands or even millions or billions of steps - spread across all the various functions from product management to HR.
Those steps, in aggregate, convert stuff people want (like capital, machines, labor and real estate) into even more stuff people want (like more of those input factors, or like food, entertainment, philosophy, mobile phones, medicines, etc.).
Some, perhaps many, of these steps are unknown. If you’re a CEO, you hire people because you don’t know, or couldn’t valuably do, all the steps involved.
For example, if you hire a digital marketing manager, she will do all the steps involved in creating a usable site architecture, or she will manage the process of getting user feedback or writing a tweet. But the routines are still there, just unknown.
The people performing those actions may not even be able to plot out the steps themselves, but the reason they stay in their jobs is that they’re able to somehow get consistently from the inputs you give them to the desired outputs.
This is, of course, why automation works as a strategy for producing more stuff. It involves someone uncovering all the hidden steps, then making those steps cost nothing to execute. The challenge is extracting the routines from people’s heads, or modifying them so that new non-automated stuff that people have to do (for example, filing a ticket in your ticketing system or talking to your Uber driver) is rare or is heavily outweighed by the savings of the new automation.
It also suggests the folly of treating anything in your business as a one-time event.
For example, I have launched and re-launched several websites in my career. There’s a pretty clear difference between sites that have met their stated goals, and ones that haven’t, which is that the successful launches haven’t really been launches. They’ve been rollouts of new portions of a site over time, combined with a process for consistently QAing the site, developing its rank in search, user testing, A/B testing, and lots of other things.