Part 1: The TPC Tax
Have you pondered how the commercial process works in an organization? How efficient is it? Does it deliver the quantity and quality of commercial ideas you desire?
The journey from an idea’s inception to its commercial realization within businesses is remarkable. The birth of an idea is akin to an artistic expression – raw and full of potential. The art of ideation seeks exploration and understanding. As an idea is nurtured and explored, it takes the form of content, sparking questions and conversations that refine and energize it. This iterative process of exploration and conversation gradually transforms the idea from Art to Science – a phase where it’s systematically explained and understood.
The Challenge of Complexity
The journey from an idea to commercialization often experiences a slowdown in large organizations due to a series of questions, concerns, and undealt complexity. The dearth of such decisions is often attributed to the lack of Transparency in content, Persistence in conversation, and Cumulativeness in computation. This is what Mu Sigma calls the TPC Tax, which increases the cost per question and slows the progression of ideas over time. The TPC tax makes it tougher to get decisions that move the organization forward. With additional layers of rigorous governance and compliance activities, the challenge can seem insurmountable.
The implications of the TPC Tax cannot be ignored. A lack of transparency is seen when organizations, especially those that operate in silos, invariably cause a lack of transparency in knowledge and initiatives. In such organizations, knowledge transfer is limited, teams intermittently interact with each other, and ideas linger within teams, often getting shelved because of a lack of communication and collaboration. Similarly, without persistence in conversation, knowledge is not persisted for reference, learning and re-use. Strategies and discussions are not captured and remembered, which leads to companies focusing on improving existing operations rather than taking risks and exploring new avenues for growth. Finally, a lack of cumulativeness, or the inability to accumulate knowledge for organizational understanding and learning leads to unnecessary replications of old ideas, methodologies, and strategies, reducing forward momentum of organizational ideas.
At the heart of this challenge is undealt complexity. Complexity, often viewed as a product of contemporary times, has always been a constant in organizational contexts. It raises questions: Is it an inadvertent by-product of technology or a misunderstood opportunity waiting to be leveraged? Understanding complexity involves recognizing its attributes – heterogeneous, nonlinear, probabilistic, dynamic, interdependent, adaptive, and emergent. Acknowledging and understanding these characteristics of complexity is the first step towards harnessing it effectively.
By ignoring this complexity, the cost per question, i.e., exploration, goes up making the journey from idea to commercialization much harder. A higher cost per question leads to a delay in realization of value from ideas and hinders growth. Organizations that do not deal with complexity have second thoughts about whether ideas can be pursued. They become risk-averse and unexcited about exploration and experimentation. This state of inaction can really paralyze an organization.
But how can organizations address the TPC gap and deal with complexity? Stay tuned for Part 2 in this series, which will discuss the concept of First Principles Thinkers who can help organizations explore, execute, and exploit better.
Meanwhile, tell us in the comments if you believe your organization is challenged with a growing TPC tax and how you are dealing with it.
