Sooner is better than later
Why you should get rid of business problems as quickly as possible
I have a degree in industrial management and industrial engineering. I can understand a balance sheet and a profitand-loss statement. As an engineer, I can also understand the things that cause those results to happen.
One of the first things anyone who is paying attention learns is that the best and cheapest way to handle a problem is to prevent it from happening in the first place. Barring that, the sooner we address and solve it the cheaper it will be, not just in terms of monetary costs but in human suffering as well.
For instance, cancer is one of the most dreaded words in the English language. Many of the cancers diagnosed in the early stages can be overcome, and the patients can be restored to good health. But if you have stage-four cancer, while it’s not completely hopeless, it’s pretty close.
So too in business. Many problems begin as minor annoyances, which are easily ignored. Unfortunately, these minor annoyances grow, sometimes exponentially, and we often don’t get around to fixing them until they can no longer be ignored. Now, you have a giant problem burning cash, because the meter is always running.
Some years ago, I did some troubleshooting and problem-solving for a company in San Jose, Calif. They were a high-tech startup building a leading-edge product for internet providers. Everybody wanted this product, as none of the competitive offerings came close.
Unfortunately, the product had a reliability problem caused by latent defects.
The product worked superbly until it didn’t work at all. Failed products were returned to the factory for repair under warranty. It started as a trickle, which quickly grew into a river with nearly 100 percent of the products eventually coming back.
The minor annoyance quickly grew into a financial catastrophe. The design engineers couldn’t be bothered fixing the problems because they were busy designing the next-generation product. It’s a lot more fun than fixing mistakes.
I was recommended by one of their major customers. The CEO was coming to Boston to placate another disgruntled customer. I met him for dinner on a Sunday evening. He took a half-dozen calls during dinner; talk about misery. He was desperate and wanted it fixed as soon as possible.
I flew to California a few days later, and we started determining the causes and fixing the most frequent or costly ones first. It took a few months, but we were able to reduce the returns to hardly any.
As I said, this was a startup, and many of these folks expected to become millionaires when the company went public.
That happened a few months later, and they made money, but not the kind they had been expecting. The reliability problem was far more costly than anyone had expected. There are always consequences, which are often unanticipated, but they show up anyway.
Another example: I participated in re-engineering the fund accounting processes for a well-known investment house a few years ago. It wasn’t even part of the project, but I noticed their busy season, January to April every year, was often an effort to find and correct all the mistakes of the previous year to “balance the trusts.” This was a Herculean effort, as many errors were combinations of multiple errors, and trying to resolve them months after they happened was foolish.
I proposed balancing everything daily.
“Ron, you just don’t understand our process!” They almost fired me for my stupidity. Then one day I got them to see it. One business manager volunteered to try it in her group. She gave everyone a half-hour of overtime daily to balance everything before going home. Implemented company-wide, the savings were phenomenal.
These are just two examples, but there are many. When we read about a company in trouble, often — not always — the malaise started as a minor annoyance, not important enough to bother with. This can be how many once great companies were brought to their knees.
Problems are not like fine wines. They don’t become better with age, just far more costly. Get rid of them as quickly as possible.
Ronald J. Bourque, a consultant and speaker from Salem, has had engagements throughout the United States, Europe and Asia. He can be reached at 603-898-1871 or RonBourque3@gmail.com.