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Physics – The route to business improvement?

Posted on 23/07/2012, 09:53

I like the phrase attributed to the author Rick Warren: we are product of our past but we don’t have to be prisoners of it.  

I was, many years ago, trained as a Physicist and started my career in The General Electric Company, Hirst Research Centre in the days of Lord Weinstock. Thirty years later, after working in a range of manufacturing and service businesses, I am now part of the team here at Pro-actions. We help owners improve their businesses.

You might think that there is not a lot of physics associated with either running or improving a business. I would like to try to change this misperception. I believe that physics is both relevant and applicable to business. All businesses – even yours. Below I offer just two examples to support my thesis that physics is good for you. It can be a route to a better and more profitable business.

Back in 1687 Sir Isaac Newton published his Philosophiae Naturalis Principia Mathematica. This work contained Newton’s three Laws of Motion that describe the relationship between the forces acting on a body and its motion.Newton’s First Law of Motion can be stated as:

Every object continues in its state of rest, or of uniform motion in a straight line, unless compelled to change that state by external forces acting upon it.

To transpose and paraphrase Newton into business friendly language: your business will stay the same unless or until something makes it change. However, those forces for change may come about for a variety of reasons and from a myriad of directions. It may be because of your deliberate actions (e.g. introducing a new product, spotting a market opportunity, cutting costs) or it may be as a result of others acting on you and your business (e.g. an aggressive competitor, supply chain interruptions, customer preferences changing, a key member of staff leaving).

The lessons from Newton are clear. If you are not content with the business you have today then you must be pro-active and take some actions. If you are content with the business you have today then be aware and alert. Things outside of your control will impact your business. The market in which you do business is dynamic; it will change due to the actions of others even if you chose to try to stand still. Change and innovation are inevitable and essential; the only question is whether they get addressed in a pro-active or reactive manner. Who or what drives the change? Who is in control?

Whenever considering innovation and change I can do no better that quote a more recent famous physicist (Albert Einstein): Insanity is doing the same thing, over and over again, but expecting different results. If the status quo is your business problem then the status quo is not the solution.

The old ideas are often the best and I would like to delve even further back in history to the 14th century for my second point, the Principle known as Occam’s Razor.

The Franciscan friar William of Ockham in Surrey came up with the concept that: entities should not be multiplied unnecessarily.  Isaac Newton later stated the rule as: We are to admit no more causes of natural things than such as are both true and sufficient to explain their appearances. 

In the language of physicists today: when you have two competing theories that make exactly the same predictions, the simpler one is the better.

A re-phrasing of Occam’s Razor can highlight its relevance to all businesses:keep it simple, stupid (or keep it short and simple). KISS.

Whilst the specific KISS acronym was originally devised by Kelly Johnson at the Lockheed skunk works and applied to engineering design tasks, it is relevant to most aspects within any business.

The so called ‘elevator pitch’ being a prime example. Can you, in thirty seconds, sum up the unique aspects of your service or products in a way that excites others? If not why not? Is it that your business is merely a, vulnerable, ‘me too’operation or is it because you have not thought deeply enough about exactly how your business differentiates itself and adds value for customers? What is your unique selling proposition? Or to put the question in a better way: what are your unique perceived benefits?

Simplicity has a lot going for it. Danger lies within ideas and business models that are so clever (i.e. complex) that they are difficult to articulate and few can really understand them. New York’s music industry in Tin Pan Alley used the ‘Old Grey Whistle Test’ to see if a tune would catch on. I like the ‘explain it to your Grandmother’ sanity check for business propositions. Would sub-prime mortgages have been so widely sold if banks and financiers had needed to get the approval of their aged relative?

Those readers who are currently working in the manufacturing sector will be very familiar with the concepts of ‘lean’ and ‘just in time’. However the tools and techniques such as value stream mapping are really the application of Occam’s Razor and apply to all businesses irrespective of the nature of the final customer offering.

Next month, when you sit down to review your management accounts, try asking yourself the question: What would Sir Isaac Newton do now if he was running this business?


John Grange

Business Improvement Specialist

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