Advice to write a plan to start your business



May 2015



5 Startling Consequences To Corporate Profit Decisions

Written by , Posted in Business, Leadership

Not every decision will save money for a company.


5 Startling Consequences To Corporate Profit Decisions

There’s something about larger companies that often screams big and slow. They’re like elephants lumbering through the open fields, unable to turn away from the obstacles in their path and yet at the same time so large it doesn’t matter.

In the pursuit of their goals, a decision sometimes can have side effects that can cost these companies thousands of dollars, but more importantly employee satisfaction. As employees feel sidestepped and stepped on, they go through a process of grumbling, then complaining, then quitting as they feel disconnected.

All these large companies were small once, however; often started by disgruntled former employees of companies who made their own decision or two that was peculiar or disquieting. The onus is on the new business owner to ensure every decision won’t alienate your employees or accept blinders in your race towards profitability.

1. NO talking

“Shhh, your talking is disturbing me.” Something you hear at the nine pm movie, not the nine am office meeting. It’s true though, some large companies are so focused on the efficiency bandwagon that they’ll throw the baby out with the bathwater.

Yes, I understand you’ve made the decision to have a functional expert and a chain of command, but if Billy is walking passed my chair and there’s a high chance that he’ll have the answer, why would I expend the energy and time to walk halfway down the hall and interrupt my manager Lilly to verify that the widget I think I need is in fact part number 256558j, especially when there’s a chance Lilly may not know?

I get that companies need policies to address the tongue waggers, but that doesn’t warrant banning speaking altogether. Respect and trust. Respect your people by letting them know that talking is one thing, but incessant talking is another thing entirely. Trust that once they are aware of your wishes that they will follow suit, talking when it won’t reduce their speed and efficiency. If your employees don’t respect your wishes enough to reduce the chatter or trust that you may know what you’re speaking of then perhaps it’s time to reassess your relationship.

2. Account for every second …even when you’re crapping

Once upon a time I worked for a company in customer service. While it wasn’t a call centre, we sat in cubicles either calling people or waiting for their calls. Our primary tool was the telephone. The company’s decision was understandable. They wanted some idea of what we were doing for efficiency and rewarding us for our successes, but the method chosen was extreme. The computer interface required us to signify anything that we were doing, on call, paperwork, even going on break. I’m sure the decision was designed to give a different answer to customers calling in to the company, however from our perspective, it was logging everything down to the time we spent in the bathroom. I’d hate to have irritable bowel syndrome. You might get fired.

3. Have an offline version of all paperwork in case the power goes out.

In the pursuit of perfection, companies are looking to become ISO certified. For one certification, every decision is recorded. In today’s word of electronic copy, however it’s possible to do so without printing off a thousand pages of paper. In fact, some companies go so far as to require their special operation protocols ready for offline use if the power or the internet fails.

This decision can create a very laborious task to replace old papers and the wasted paper mounts up. For instance, a company that has twenty of these protocols change a week, each with 20 pages has over 20,000 pages printed per year. At 5 cents a page it’s over a thousand dollars a year, a thousand dollars a year for each installation the company has. Can you say expensive?

We had a similar protocol at the bank, called a job aid. Some were only a page, while others were ten. While we weren’t required to print them, some did take it upon themselves to do just that. I can say in the beginning I printed them, making sure they were on hand when I needed help. If you apply the same math to these job aids it could be Now you’re talking as many as a thousand sheets of paper per branch and there are hundreds of branches, 1040 to be exact, in Canada alone.

There’s something to be said for a crib sheet, but printing ten thousand pages is a horribly inefficient decision when you could save the file to your computer. If the internet is down, you can access the info offline. If the power is out, you can’t work.

It can be ridiculously time consuming maintaining all of these protocols as they are updated as well. The more protocols to maintain, the more work there is, searching and replacing. If you have an employee taking care of that aspect, you could be spending a hundred dollars or more per month on something that’s unnecessary. Poor decision.

The added expense to this whole process are the mistakes made by employees using their offline job aids that should be updated from those online. Whether by corporate decision or social acceptance, printing your job aids can be expensive.

4 Outdated computers that can’t run the software.

There is one snag however when it comes to that offline reading.

Some companies purchase computers for their employees and then make a decision not to replace them for 7 or ten years, citing overall cost of replacement as the reason. After a time reading anything becomes problematic. I’m not saying that the screens are still monochrome, but when the system is bogged down reading a .pdf there is a definite issue.

It is a fact that some companies need to ensure network safety, but there are ways to keep that security separate from the computers themselves. In the long run, your people need to accomplish their jobs and faster computers often make that happen. You aren’t playing games however, so you don’t need high end graphics or computing power. You can easily get away with a few hundred dollars per terminal. It doesn’t take many work hours per year to achieve that break-even point AND you get the tax write off.

5. Wrong person, wrong position

This decision can have some major consequences. Businesses grow and hire more employees. Eventually the owner can’t keep track of everyone so they have to delegate to someone a level of authority over the others. Leadership isn’t bestowed however. Just because someone can do a job well however, doesn’t mean they can teach that success to others.

Unfortunately large companies promote and forget, leaving newly minted managers to fend for themselves rather than spend money on training. Because these new managers lack the skills to train and manage others, the team suffers. You’ll see poor decision making, unnecessary delegation, improper training of others, and even inaccurate performance reviews because of this lack of training, and that’s all assuming the person should have been promoted in the first place.

Some people shouldn’t be in a position of authority, period.

As companies grow, priorities change and unfortunately, those at the top of the chain of command can’t always see the front line consequences to every decision. As you build your business remember this lesson so you can keep true lines of communication and know what’s happening out on the front line. Just watch any episode of Undercover Boss to see how some large companies are trying to understand the consequences to even the smallest decision.

One of the best ways to enshrine the values that you want to have for your business is to put it in your business plan. There, you will be constantly reminded to check on the things that make you go hmm.

How big is your company now? Do you have to audit it to see if there are odd management choices? Or perhaps you’ve seen this type of behaviour at a prior employment.

In any case, I’m always here to answer any questions or critique your ideas for your business plan.