A lesson from a company, that I would otherwise loathe.
Back at it with those cross-functional principles®
BASF is a German chemical manufacturing company. It’s the kind of company that, if you are like me, you would have scarcely heard of. I had fleetingly heard of the name when they briefly ran an ad campaign on TV (back when I had cable, so over 5 years ago). They hold the distinction of being the largest chemical manufacturer in the world. A distinction which, while I respect, couldn’t care lesser for. BASF is exactly the kind of giant corporation that I loathe 1. But I am the kind of guy who would give someone credit where it’s due - in this case, their idea of being verbund is something that has captured my thought. It’s an idea that I really admire.
So, “What does being verbund even mean?” you may wonder whilst stroking your chin. Let’s hear it straight from the horse’s mouth:
Our unique Verbund concept is one of BASF’s greatest strengths. The driving principle of the Verbund concept is to add value through the efficient use of resources. At our Verbund sites, production plants, energy and material flows, logistics, and site infrastructure are all integrated. BASF currently operates six Verbund sites worldwide: two in Europe, two in North America and two in Asia. The Verbund system creates efficient value chains that extend from basic chemicals all the way to consumer products. In this system, chemical processes make use of energy more efficiently, achieve higher product yields and conserve resources. By-products of one process are used as starting materials for another process.
Maybe I am blinded by my prejudice, but I felt icky reading their corporate press releases to find this. Despite my extreme aversion to this hackneyed prose, I can’t help but think about this one line:
By-products of one process are used as starting materials for another process.
This seems like a pretty simple idea, yet it’s not something that I usually think about. Can the product, or even a by-product of a certain action be a resource for another? It’s an elegant way to thinking about outputs.
A prioritisation and optimisation framework
I am a fan of collecting mental models. I would like to think of “Verbundity” as yet another mental model 2. A mental model to minimise wastage, and maximise output. It’s not just the output-as-an-input-type relationship that can be considered, but also the by-product-as-a-reagent for another action.
To apply this, we would have to think of projects and goals as a set of processes, which have inputs, outputs and reagents (things that accelerate the process). Now, once we have done this, we should see if the processes can be arranged such that the by-product of one cane be the resource for another (input or reagent).
Let me take a few practical examples:
- Project 1: Reading 52 books this year.
- Input: Reading books.
- Output: 52 finished books.
- Reagent: Some form of motivation.
- Project 2: Having constant creative output.
- Input: Ideas
- Output: Creative output.
- Reagent: Enthusiasm for ideas - exciting ideas
- Project 3: Becoming a better writer.
- Input: Ideas to write about.
- Output: Written pieces.
- Reagent: Urge to write.
- Project 4: Create/contribute to an opensource project.
- Input: Programming, idea.
- Output: Library, project.
- Reagent: Motivation, programming skills.
Project 1 output can be used as a reagent for Project 2. Project 1 output can be input for Project 3. Project 4 output can serve as an input for Project 2. Project 3 output can serve as an input for Project 2 too.
The basic idea here is that when embarking on a project, try to minimise loss by associating the by-product of that project to another project beforehand. Creating a network of interlinked projects leads to a value that is greater than the sum of its parts.
But this sounds kinda trite.
To be honest, this principle is neither new nor original. It’s a plain and simple optimisation of projects 3. Repackaging this idea to “Verbundity” makes things more fun. And when things are fun, they are much easier to apply. Just because I like the idea of being Verbund and how that sounds, I will end up thinking more “Verbundly”.
Whenever I have a set of tasks, I will think of them in a manner such that even when tasks fail, I can use their by-product as a resource for another task or goal. I may even plan tasks, projects and goals around the idea of verbundity.
I like the word verbund so much, I will be verbund in earnestness - and therein lies the value for me.
Footnotes
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I hate corporates. Do I have a good reason? Yes, many. Am I unfair to these giant corporates? Maybe sometimes. Straight out of college, I got a PPO (college-speak for getting a job offer before graduation) from a giant corporation. I hated the idea of going to work there. The moment I got that PPO, I spent all my energy on getting another job. I had to get out of this job. Fortunately for me, I did get another job at a startup. This startup then laid me off. Then I got a job at an even smaller startup. The smaller the company I have been joining, the better my life has got. Read my tales of my layoff here. Anyways long story short, I think corporates kill innovation, motivation and resiliency. They will be the downfall of our society. You heard it here first folks. ↩
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Yet another mental model - YAMM? ↩
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Notice the tag on this article. These are just my musings. Not everything has to be an original ground breaking idea ↩