Times are hard. Really hard. I lost my chauffeur; apparently he can make more money back in his old job as Head of Obstetrics at Kraków General Infirmary. My housekeeper murmurs about never having time to work on her Uzbek translation of The Great Gatsby and my landscape gardener hints he will take a job conducting the Sofia Philharmonic unless I give him a pay rise. Nine of my ten favourite grant-making government quangos have closed. As a consequence, I was fearing that I might have to take a proper job when my academic bursary runs out in a few months. The Cultural Studies Department at Southampton Solent University is paying me to research why people find Lenny Henry funny. I do not imagine they will extend the bursary again; it has been ten years now, and I am still no closer to finding an answer. I needed money and there was nothing else for it. I had to call on the initiative and imagination of my favourite clone, MaV-Eric. So I climbed up the loft ladder and sought him out…

Eric: Hell-ooohhh? MaV-Eric, what are you up to?

MaV-Eric: I’m designing a portable refrigeration unit powered by solar cells.

Eric: That’s brilliant! For use in Africa, right? So doctors can keep their medicines cool.

MaV-Eric: I was thinking more of picnickers at Glyndebourne and places like that. [Grabs a working model to demonstrate.] Look - this unit is exactly the right shape and volume to take a 500ml tub of Häagen-Dazs. And this one is for a magnum…

Eric: …looks a bit big for a choc-ice on a stick…

MaV-Eric: … of champagne, you silly.

Eric: Well, that’s great. Do you have any orders?

MaV-Eric: No. I need some seed capital to make some more prototypes first.

Eric: Well don’t look at me. Actually, I came up here because I was hoping you’d start giving me some money for a change.

MaV-Eric: Oh, it’s like that, is it? First you bring me into this cruel world, then you lock me in the attic like some demented relative you’re ashamed of, then you throw me out to fend for myself.

Eric: I’m not throwing you out. I want you to come back and pay rent.

MaV-Eric: Alright. But I’ve spent my entire life stuck in this loft, isolated from the outside world, with no practical experience of how to do anything, no sense of priorities and spending my days making up peculiar fantasies that bear no relationship to truth or reality. What kind of business needs people like me?

Eric: Advertising.

MaV-Eric: Great! When do I start?

I was heartened by MaV-Eric’s enthusiasm, and immediately called my old school chum Brendan ‘Nosey’ Parker, who is the sleeping partner in a successful market research firm based in central London. Parker said he was glad to help, but first MaV-Eric would have to be interviewed by his very-wide-awake partner, a Ms. Claire Z. Perkins…

[MaV-Eric bursts into the pristine reception of Perkins and Parker, out of breath and looking dishevelled.]

MaV-Eric: I’m so sorry that I’m late. My train was delayed.

Receptionist: May I help you, sir? Do you have an appointment?

MaV-Eric: Erm, yes [straightens himself up] My name’s MaV-Eric. I’m here to see Mrs. Perkins.

Receptionist: [Flicks through her notes] Yes, you are late, aren’t you? Your interview was scheduled three hours ago. And it’s Ms. Perkins, not Mrs. Perkins.

MaV-Eric: Oh, I can explain. I was on a very long train.

Receptionist: That makes no sense. Why should the train be delayed by three hours just because it is long?

MaV-Eric: Because it was the wrong train. The train I wanted was much shorter.

Receptionist: [Sneering] And something tells me you’ve had a wasted journey. [She gestures at the comfy chairs in the reception area.] Take a seat.

MaV-Eric: Where?

Receptionist: I beg your pardon?

MaV-Eric: Where should I take it?

Receptionist: Nowhere. It was a figure of speech. Now, if you don’t mind, please stand in the corner, facing the wall, and try not to make any noise.

[MaV-Eric does exactly as he is told, standing silently in the corner.]

[Claire Perkins walks in, wearing a crisp white blouse, dark skirt and knee-length leather boots. She is carrying a large envelope.]

Perkins: Stacey, have this Fed Ex’d to Hong Kong [she hands the envelope to the receptionist and turns to leave...]

Receiptionist: Your 11.30 has finally arrived [points at MaV-Eric].

Perkins: [Walks over to MaV-Eric] We didn’t think you’d show. Come with me.

[Perkins briskly walks away, taking long, confident strides in her boots. MaV-Eric hurries to catch-up. They walk across an open plan office which is strangely empty, towards a glass-walled committee room at the far end. In the room, a dozen twenty- and thirty-somethings sit patiently and quietly, dressed in casual designer wear. Behind Perkins' back, MaV-Eric opens his mouth as if to speak...]

Perkins: [Lifts her hand alongside the side of her face, as if it signal stop. Without breaking stride or turning around she says...] No talk. Just sit at the back and be a good boy whilst we have this meeting. But pay attention because I’ll ask you questions later. I want to test your attention span.

[She arrives at the committee room door, and turns to grab the handle and face back towards MaV-Eric.]

Perkins: I can’t abide people who can’t concentrate. Understand?

[MaV-Eric nods. She holds the door open and he scurries through, looking for a chair at the back of the room. Perkins stands at the front of the room and takes charge.]

Perkins: Well, I suppose we’ve all been pretty complacent since we won the Tesco Value Highland Spring Water contract. Me included. But we can’t go on resting on our laurels. Have you seen this report? Let me read from it:

“Since the invention of the telephone, an alert or ‘ring‐back’ tone has been played to the calling party when calls are placed. This continues while the caller waits for the call to be answered. The typical sound of a ring‐back tone is a staccato or steady tone, letting the caller know that the call is being connected. During this time the caller is typically alert and silent waiting for the call to be answered. In fact, it is arguably one of the few times in our modern and hectic lives when we provide our undivided attention to one task. A ring‐back tone (“RBT”) is idle time with a captive audience (the inbound caller), and since the early 2000’s has been repurposed by many mobile operators for music and other kinds of audio entertainment content. Marketing and advertising messages can be distributed through RBT and the first several of these ‘Ad‐RBT’ services launched in 2008 in North America, Europe, and Asia. Ad‐RBT represents one of the most compelling and scalable new media platforms in recent history.”

[Perkins slams the report down on the end of the committee table.]

Perkins: So what do you all have to say about that?

Fattish black bloke wearing a khaki cardigan near the front: We’re very sorry.

Perkins: Good answer. So you should be. I pay you people to find new ways to ensure advertising is crammed into every waking moment of the lives of every living person, whether they like it or not. And for not one, but two years we’ve been sleepwalking whilst our competitors pipe adverts to people whilst they wait to book a table for dinner, when they call to make a dentist’s appointment, even whilst they wait to complain about the poor quality of their phone service. Millions of hours of captive advertising time, and we’ve not been exploiting it! We’re behind, people. We’re behind and I don’t want to be behind. [She points at her bottom.] I want to be ahead. [She points at her head]. Ideas should come from here [points at her head] and not from here [points at her bottom]. So give me ideas and give me them fast. I’m looking to you - my creative team - to generate some modest proposals. We need new ways to fill people’s lives with more advertising. [Clicks her fingers impatiently.] Come on!

Fattish bloke: Advertising messages cut into thin strips so it can be stuck and seen on the staircases of public buildings.

Perkins: Been done before.

Mousy woman: Billboards that rotate so that you get three messages instead of just one.

Perkins: Old hat.

Fattish bloke: Paint the underbellies of passenger jets.

Perkins: You need to look up once in a while. Another idea that’s been done already.

Tall nerd: Solar powered advertising on the side of street bins. We give them to the council for free but keep the rights to change the ads…

Perkins: [Angry] Don’t you watch Dragon’s Den?

[There is a long silence as the junior execs look around at each other and are unable to think of what to say.]

Perkins: You’re all pathetic. All bottom feeders. Or bottom talkers. One or the other [sighs]. Hey, you at the back [points at MaV-Eric]. Are you paying attention? Are you listening to the drivel these nincompoops are coming out with?

MaV-Eric: Yes, yes I am. May I make some suggestions?

Perkins: [Laughs] Why not? I don’t see how you could do any worse.

MaV-Eric: String in alphabetti spaghetti.

Perkins: Excuse me?

MaV-Eric: Put edible string in alphabetti spaghetti. String the letters together in a specific order. That way they can be used to spell out messages like “drink Coke” or “eat at Subway”.

Perkins: Hmmm… interesting.

MaV-Eric: Glow in the dark messages on clothes people wear at nightclubs. When they go out dancing, the UV light will reveal the advertising messages on the backs of their shirts and jackets.

Perkins: You might be on to something.

MaV-Eric: Adverts on ice lolly sticks. Instead of some terrible old joke, give a recommendation for some sweets or a toy that kids might like.

Perkins: Go on.

MaV-Eric: Sponsored hotel ceilings.

Perkins: Sorry?

MaV-Eric: So when you wake, the first thing you see is the advertising message on the ceiling.

Perkins: I like it.

MaV-Eric: Sponsored pillow cases.

Perkins: In case you sleep face down.

MaV-Eric: Exactly.

Perkins: What else?

MaV-Eric: The automated voices that tell you the name of the next stop on public transport - also have them say: “this message was brought to you by…” at the end.

Perkins: That might work.

MaV-Eric: Wine glasses in restaurants. When you finish your drink, you discover the advert written in the bottom of the glass. Something like: “why not order another bottle?” or “you’re drunk, better call this number for a cab to take you home”.

Perkins: That would work.

MaV-Eric: Sponsored Blackpool Rock. Instead of reading ‘Blackpool’ it reads ‘Eat at Nando’s’ instead. Anyone who buys the rock gets the price reimbursed when they order a meal from Nando’s.

Perkins: Niche, but I like it.

MaV-Eric: School uniforms. Just like football shirts, they should boast a sponsor.

Perkins: That’s a potentially huge market.

MaV-Eric: Genetically modified butterflies. Change the wing markings to carry logos, like the golden arches of McDonald’s or the Nike swoosh.

Perkins: I could imagine it might be a while before we’ve perfected that technique, but like you say, some big businesses might be interested in investing in that idea. Do go on.

MaV-Eric: Pizza toppings. Get a five percent discount from Domino’s if you let them arrange the pepperoni to spell out the name of a TV show you might want to watch whilst eating your pizza.

Perkins: I like the way that reverses the cross-marketing flow.

MaV-Eric: Condoms.

Perkins: Excuse me?

MaV-Eric: You only get to read the message when they’ve been unrolled, so to speak.

Perkins: You’d need to keep the message short, just in case.

MaV-Eric: Pre-trained budgerigars. They come cheaper from the pet shop because they’re already trained to repeat ten advertising slogans.

Perkins: Talking birds - an idea that definitely has some potential. Anything else?

MaV-Eric: Just one more idea: tattoos.

Perkins: Oh, I don’t think that’s such a good idea. People will tend to cover up and then you would never see the marketing message, unless you tattooed the message on somebody’s face, and some might find that off-putting…

MaV-Eric: No, you don’t understand. I meant tattooing the inside of people’s eyelids so they see the advert whenever they close their eyes.

Perkins: I think we can safely say that you’ve got the job.

That was how, thanks to MaV-Eric and his genius for advertising, my money worries were all solved. Though I must admit I find that the tattoos on my eyelids get quite itchy…

Nobody can manage what they cannot understand. It is a common principle, enshrined in many business aphorisms. “Stick to the knitting”. “You get what you measure”. “Keep it simple, stupid”. The list goes on, but the underlying idea is the same. At the same time, the world grows more complex. Supply chains are ever more international, and so is finance. New layers of technology sit upon older layers of technology, creating pyramids that nobody understands from top to bottom. Training and education can deliver staff with increasingly niche and specialist skillsets. In the midst of this, businesses still pursue universal goals, whether delivering profits to owners, pleasing products and services to customers, or motivation and satisfaction to workers. The trick to handling complexity, in order to keep businesses understandable and hence manageable, is to break businesses down into units, and to understand how these units fit together and affect each other. This is the essence of modularity.

Modularity may seem so straightforward that it is obvious, but it is rarely obvious in practice. Employees may only know about their department, and know little of what the rest of the business does. They may be completely divorced from the customer’s experience. Managers may have an idea of how things fit together, but are rewarded for fighting their individual corner, not for doing what best helps the whole organization. An outsourced function is not part of your company, but it may be just as integral to business success as any function performed in-house. Suppliers may be separate companies, but their failure may cause the failure of your business. Long-term business success will often depend on relationships within the company, and between the company and others. These relationships may change over time, but will greatly influence the health of the business.

Teaching managers to think of business in modular terms is not simple. The biggest obstacle is the time and effort spent working out what each part of the business does and all the interactions between the modules, including those that sit in other companies. Working out the model for an individual business is time-consuming, and the benefits are all indirect, so it would be hard to spend the time and resources needed to do it well. In contrast, generic industry models are abstract. They need to be tailored to the relevant circumstances of individual businesses. There is also the challenge of getting rival businesses to pool efforts and devise a common model; some may prefer not to contribute but merely to wait and see if they can use the finished work. Despite the obstacles, there have been successes. In software development, frameworks like the Software Engineering Institute’s Capability Maturity Model Integration have gained popularity. For telecommunications providers, the TM Forum’s Solution Frameworks are the de facto standard for planning major business-wide transformation. One difficulty with frameworks is that they can end up seeming just as complicated as the businesses they try to describe. However, they do help management in several important ways, which are briefly described below.

Distinguish the success of a part with the success of the whole

Poorly chosen targets, corporate politics and poor data can all conspire to encourage the business to reward units that act ’selfishly’. A selfish approach may seem natural, because businesses compete with each other. But the IT department should not be competing with the Sales team or the people who work in Customer Service. Targets and performance criteria for every module should be based on the benefits to the business as a whole. That means understanding how the modules connect and complement each other.

Measure the performance of a module based on what it controls

You would not blame customer-facing staff for spending a lot of time on refunds, if products are faulty because of poor quality control on the production line. Even so, it is sometimes difficult to link measures back to root causes. Modularity encourages a better understanding of what each module controls and does not control. This in turn encourages performance to be linked back to root causes, so improvement is focused where really needed. The correct approach is to measure the performance of each module based on the value it adds, and to set targets accordingly. Where the failure of one part of the business causes issues downstream, ensure that there is accountability and the resolution is taken right back to the source. Understanding the performance of each module, and relating this to the products and services supplied, will identify those activities that drive profits and customer satisfaction, and where there is the potential to cut costs.

Standards help everybody

Standards are an aspect of modularity. To define how modules interact, it is necessary to set standards. Standards can be limiting, but in large businesses the loss of freedom is offset by the vital improvement in the consistency of how the business works. Adopting broad standards in the performance of work is a good way to train people and make them feel part of a team. It is common to adopt technical standards, but many other activities can be standardized. Idiosyncrasy in how people work can be discouraged by having staff change around and do different jobs, at least on an occasional basis. Giving everyone an overview of what the business does will help to foster a sense of team spirit that reaches beyond departmental boundaries. If tasks are performed in a standard way, it is easier to cope with staff turnover. If staff have some familiarity with performing a variety of jobs, they will be better able to cope with new requirements at short notice.

The more standardized a business, at every level, the easier it is for suppliers to meet its needs. Standardization also makes it easier to shop around and find alternate suppliers. A modular approach works for services just like manufactured goods. The ease of swapping in new parts for old parts makes a business more flexible. Bringing in temporary staff or a new source of components may be vital for handling a surge in demand. The same kind of flexibility also helps with managing reductions in capacity when sales are poor. Suppliers are an extension of the business, performing modular roles per expectations defined in a contract. The supplier’s service levels can be monitored by extension.

Focus on what you do best, give fair rewards for the rest

The driving force behind outsourcing is that some tasks can be more efficiently handled by letting an outside, specialist business perform them. The best known examples are inherently modular. For example, the payroll of a manufacturer has a lot in common with the payroll of a bank. In contrast, managing payroll has very little in common with the core business of a manufacturer or of a bank. Common and regularly recurring tasks are obvious candidates for outsourcing. However, there may be ways to incentivize and engage outside suppliers for more risky or creative challenges. Take Apple’s iPhone Apps Store. Apple created an environment that ensures third parties get a transparent share of reward in exchange for the risk they take. In doing so, they handed over the risky task of developing new content for the iPhone, whilst creating a new feature that attracts more customers for their product. By giving a reasonable return to the modules outside of Apple’s company - the third party apps developers - they both outsourced risk and reaped a greater reward for their own business.

Summary: recognizing limits

For an intelligent, successful, and confident executive, the hardest challenge may be to recognize his or her own limits. But the human mind has limits. Even the versatile minds of a Benjamin Franklin or Leonardo da Vinci would be overwhelmed by trying to understand the intertwined complexities of money, machines, markets, laws and human behaviour that determine the success of a modern large corporation. Failures of big businesses show that risks can be underestimated and circumstances can outrun the company’s ability to change. To solve complex problems, it is necessary to break it down. There must be trust to recruit and delegate to managers who handle their individual part of the puzzle. Top level management is there to ensure the parts fit together to form the whole. By being modular, businesses become more adaptable. Identifying the important relationships between each module, establishes the key criteria for the success and profitability of the business. Knowing limits drives businesses to acquire the data needed to make effective decisions and plan ahead, instead of just responding to short-term variations from expectations without understanding what has caused them or if they represent more fundamental problems. Modularity keeps business intelligible, and by keeping the business intelligible, managers can manage even the most complex businesses with confidence.