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June 14, 2021

A Case for Unbundling

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“Oh, it’s very simple…”

This is how the character Sheldon, from TV’s Big Bang Theory, begins his nearly incomprehensible explanation of “Rock, Paper, Scissors, Lizard, Spock,” a supposed improvement on a classic game. To Sheldon this all makes sense. Meanwhile, his audience sits by in apparent confused silence. “I’m sorry. Can you repeat that?”

Bundling Up, Stalling Out 

Organizational leaders are often like Sheldon. We take perfectly acceptable, functioning products, services, processes, structures, or offerings and add layers of complexity and functionality. Why do we do that? The reason varies. And sometimes it’s a good idea and sometimes it’s a bad idea. Bundling has its usefulness. But over-bundling can impose dicey unintended handcuffs.

1. We bundle things to gain efficiency or share resources.

You roll two departments into one. You merge two companies. You close offices and centralize personnel. You think, Who needs two accounting departments, two sales teams, or two corporate offices when you could have one? You’re all part of the same big family, so let’s just bundle these functions together.

When we do this, though, we often underestimate the added strain on individuals and departments, and we overestimate the capacity of those individuals and departments. We also tend to overlook the relational and cultural components that may or may not blend seamlessly when things are combined.

2. We bundle things to make the final offering appear more valuable.

You see two parts of your offering, and assume that because they are related they should also be combined.

“If I sell bows, wrapping paper, and cards, shouldn’t I sell them in one package? After all, isn’t that more valuable for the consumer?”

“I do oil changes and wash cars. Shouldn’t I sell these as one combo-offering?”

Maybe. Maybe not. The real question should be, “Does your consumer want this?” Do they want to buy their bows with their wrapping paper packaged together, or is the combined price point too high? Do they want to get their car washed and oil changed in the same visit, or does that take too long and negate your fast service?

3. We bundle things to avoid making a hard decision or having a difficult conversation.

You see a logjam within your organization, and instead of breaking up that jam, you work around it or create a new system to manage the broken system.

The sales team keeps turning in their expense reports late. Instead of finding a way for them to resolve this problem, you make the accounting department responsible for managing when the sales department turns in their reports. Sure, the expense reports will get turned in on time, but you might also have accountants that resent the extra work and a sales department that resents being micromanaged.

4. We bundle things to over-tailor our offering to a key customer, donor, or founder.

You have a key donor or customer who is pushing for a special offering. It doesn’t make long-term sense, but you are so focused on the short-term goal or sale that you just press ahead. Or, because the donor gives so much to the organization, you just can’t say no.

Too often we layer on additional ventures simply because the money seems to point us that way. But we have to discern the difference in short term and long-term funding, real gain and staged gain.

Certainly there are occasions when bundling is helpful. But when you are problem solving, looking for clarity, or sorting out the sequence, unbundling or deconstructing can also be a very useful tool. I use the tool of unbundling every week in my personal life and in helping my clients.

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