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Does business walk too thin a line?

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For many years now, American companies have touted their cost-cutting initiatives and new processes to monitor both productivity and waste. The goal, even for massive, multinational corporations, has been to be “lean,” “just-in-time” and, most recently, ”real-time.” These mandates—which have obvious benefits to profitability—gained a passionate following, first in manufacturing, then in operations and procurement and finally in functional departments, such as marketing. Information technology, especially local and wide-area networks, has made all this possible, of course. It's one thing to want “real-time” data about your machine tools, or sales or marketing campaigns. But to get it, you need a network. And it's undeniable that individual marketers, computer-equipped and network-connected, routinely do the work it would have taken teams of their predecessors weeks to accomplish. Still I've got a question. Shouldn't our businesses be lean and nimble? I'd argue that companies that exemplify the first characteristic without the second are in danger. Consider an evolutionary analogy. Creatures can be perfectly adapted to a particular environment but terribly vulnerable when those habitats change suddenly; at Brookfield Zoo, outside Chicago, 16 stingrays died last month when a malfunction allowed the tank temperature to rise just 10 points, from 79 to 89 degrees. A few months ago, at the Business Marketing Association annual conference, I had a brief but fascinating breakfast conversation with a marketer who had spent decades in the oil industry. While others in the room bemoaned the high price of gas, his worry was quite different. He worried the oil industry wouldn't be able to scale up capacity quickly enough to take advantage of a historic increase in worldwide demand because it had, in terms of staffing and operations, “no fat on its bones.” He was suggesting a downside to leanness. I agree. Indeed, lean companies could be at more risk when there's a long winter. Let's not forget that fat is advantageous from an evolutionary standpoint. It's Nature's way of storing energy until conditions improve. This might explain the old saw that claims companies that continue marketing in a downturn do better than those that stop. Being fatter (read: healthier) than their competitors to begin with, they have the reserve to expend on marketing during the down cycle. And what about when the economy turns around again, as it always does? Those who can run quickly and aggressively have a real advantage. So is your organization just lean? Or is it lean and nimble? Ellis Booker is editor of BtoB and BtoB's Media Business. He can be reached at ebooker@crain.com.
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