Strategic Frugality in Action

Within the federal government business sector, cost-effective planning has remained a constrainable rule of conduct. Thrifty execution of business planning has appeared to be the rule of thumb when responding to government initiatives and solicitations, but is the lowest dollar value-really the 'lowest-cost' answer to the government's needs? Certainly, the newest procurement paradigms decry a desire for 'lowest cost' respondents, typically stating pricing generally carries greater weight than technical and managerial capabilities. A natural thought for the solicitation respondent is that conducting business with the lowest dollar value and least cost is the most productive mindset for answering the government mail.

The reality is that while our environment changes rapidly and technology as well as end-users become more and more sophisticated, effective Business Enterprise Architecture (BEA) aids the delicate balance between growth in innovation and cost savings. And, cost savings doesn't necessarily equate to greater value if funding for research and development (R&D) or innovative growth suffers in the process. In fact, recent research states that after years of corporate cost-reduction - without strategic BEA frugality - a counter productivity results in as far as enabling new technology and the introduction of innovative technologies. Corporate patterning is a strong motivator towards growth and potential or maintaining the status quo - even if the status quo is from 1999. When controlling costs is the underlying element of organizational patterning, the introduction of new products, markets or technologies typically hits a change management wall, which isn't written into the fine print of a 'lowest-cost' response.

To achieve strategic frugality in action - there are a few simple steps for entrepreneurs and classic business leaders to embrace:

1. Accountability - greater control over cross-functional resources within the organization
2. Aptitude for innovation - change in business unit reporting to corporate core in order to achieve broader scope R&D towards expansion
3. Pull-based functional relationships - to aid and increase service support (a major proponent of government requirements today) business units should pull services from the corporate infrastructure rather than have services pushed on business units
4. Differentiated capabilities - leverage capabilities of the overarching organization and expand the corporate core portfolio, then build on it strategically invoking effective BEA
5. Ability to leverage scale - through business unit networking and ensuring fluid agility in real-time scale can be leveraged corporate-wide

The revision of thought in the expansion of both R&D 'potential,' as well as corporate growth, hinges on the strategic interactivity between the corporate core, business units and their shared infrastructure and processes. In this way-as respondents to federal solicitations for the 'lowest-cost' service support, can effectively answer government mail through efficient planning of strategic frugality in action, that decries the 'lowest-cost' may not necessarily be the lowest dollar figure in the overall life cycle of a project. The new ideology behind 'lowest-cost' may become equitable potential for growth in proficiency, derived through change management capability, via effective R&D, using a rational BEA frugality at costs that may exceed the 'lowest dollar value' and our competitors, but actually result in the best value to our client, the United States of America.

For more info: strategy+business, Frugal Growth