Tuesday, April 22, 2008

Lost Billions

I was reflecting on the company I used to work for and had a thought...Their business inexperience cost billions in lost knowledge.

The company is composed of about 5000 offices all over the world and I worked at the head office for Canada, which employed approximately 200 people before I left. It had went through 10 or so years of extreme growth and never documented one successful action. It was my job to interview employees about their day to day business processes.

Some of the questions I would ask were, "Why do you do it that way? Is there a better way to do it? Faster? Uses less time, paper, etc."

Deer in the headlights look, ALWAYS!

Once you snapped your fingers they would usually answer, "Well we have always done it that way and I was told to do it that way. Yes there is better ways to do it but we are only trained and ordered to do it this way."

Upon investigation (I'm a good detective that always asks WHY IS IT DONE THAT WAY?) I find out that when the company was composed of 5 people or so, the now manager of a huge department set it up that way just to cope with the growth.

In other words, it was the only solution they could come up with on the fly...and this inefficient, expensive method of handling business remains to this day -- only repeated thousands of times per day instead of a few.

So the difficulty now is, the person that invented this method is now in charge! She insists it only be done that way and refuses all suggestions to do it better/faster/cheaper.

After years of interviews, it just got to be ridiculous. Here was a company that had 200 thinking employees, that worked with a completely out-of-date system, that could have designed a system that was 90% more efficient being told to forget about thinking about improvements and certainly DO NOT change things.

The most amazing part is, when I would interview the person that actually designed the system in the first place, they had no idea why they did it that way. They didn't know if it was a legal (regulatory) issue, head-office issue or it was the only colour paper they had at their desk that day.

One instance is they have 2 to 3 people photocopying papers ALL DAY just to have a record. Day after day for over 10 years. Imagine the costs! When I researched it, this entire action was not necessary, it was merely someones miss-interpretation of a legal recommendation. And even after they know this fact, it still goes on just because that's the way we do it, so it must be right.

Bottom line is, if the company would have encouraged improvements, documented them and quickly trained others on it, it would have made/saved them BILLIONS across 5000 offices.

How does this apply to my business? I document my system. I document the policies and why they were made. I look for improvements. I am not going to lose the knowledge and thus future billions the way they did.

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