Doing things badly costs money

One short piece of free advice: “Doing things badly costs money.” I’m a management consultant. Recently someone asked me if that meant giving people advice all the time. I replied that it was more about observing and asking questions. We then analyse and apply lessons from one context to a different one while taking account of the difference between them so that the solution fits the problem.

They said “Ok. But if you had to give one piece of advice what would it be?” I thought about that then said: “Doing things badly costs money – a lot of money. Doing things smartly saves money, makes work more fun and makes customers happier.” They replied: “Well that’s obvious. Why do you need to tell people that?” Well, here’s why…

Doing things badly isn’t always obvious

People get caught up in the details of the work they do. Planning work, doing tasks, making sure other tasks get done, dealing with everyday problems, communicating with staff and customers – these are the things that take up most of our time at work. We notice things done badly right in front of us and we usually do something about it if we can. The problem is that most examples of doing things badly are either made up of lots of small things that are hard to notice or they occur across different parts of the business. They don’t happen right in front of any one person. It takes a systematic effort to find and fix these things. Strategic delivery requires a strategic approach to value across the organisation.

People don’t add up the cost of what they do now

Businesses and governments cost new projects – buildings, IT systems etc. They add up the cost and the benefits to see if the business case stacks up. Is it value for money? Will it improve our products or services? That seldom happens with ongoing operations. Managers assume that everyday work is reasonably efficient, effective and low risk. It doesn’t often undergo the same scrutiny as new spending. That is a mistake. Cost cutting usually means cutting jobs but the cost of redundancy, low morale, lost productivity and rehiring people later can cancel out the benefits. Managers cut jobs because the savings appear clear. If they applied value management to the business then other savings would be clear too.

Cutting waste and adding value go hand in hand

If you do something 10,000 times a year and you can figure out how to save $200 every time you do it then you save $2 Million a year, every year from then on. That is smart. There are proven approaches that have been used for decades that do exactly that but many managers ignore them or are not familiar with them. They cannot see the huge waste in their business processes. Doing things badly wastes time, cost money and annoys your staff and your customers. You can work smartly by looking at the business from the perspective of customer value – a concept that applies in both the private and public sector. If you measure value creation at each step of your processes you can control it and optimise it – and reduce waste at the same time. You can do so with both incremental and big-bang investments. All big projects should be able to demonstrate how they will impact the ongoing value creation process. They seldom do.

Proven approaches get proven results

There is no magic bullet if you have waste embedded in the way you do things. Doing things badly wastes time and costs money. You won’t fix that with digital transformation, the cloud, staffing cuts or AI. Doing things smartly to optimise value for customers means measuring and managing the value you create, consistently and well. Specific interventions to cut waiting times, reduce duplication, avoid double-entry, manage data well and lots of other things are proven to reduce cost and increase service levels. One of the best things about embedding value for money in management is that you don’t have to invent benefits management plans that don’t work and will never be implemented. You just use an existing data baseline and track the benefits as part of normal operations.

Do things well, save money and add value

If you don’t like doing dumb stuff and wasting money – drop us a line. We love to apply systematic, common sense approaches to management decision-making and help you create and embed the means to track and optimise value across your organisation. We also do rapid value for money assessments of planned or current projects. Its what we do! We are strategy delivery consultants who specialise in getting value for money for your investments in people, processes, systems and assets.

Phil Guerin, Consultant/Director, Hague Consulting Ltd. © Hague Consulting Ltd 2024. If you like this content, subscribe to our blog – it’s free!

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