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The Hidden Cost

Posted by Philip Smith on 11 January 2019

Rules and regulations Processes and procedures

As companies grow they acquire more rules and regulations to govern the processes and procedures implemented to achieve some defined state of efficiency. 

Large organisations and Governments are notorious for some truly silly outcomes as a result of this approach. A few years ago I read a report of some government department where they spent $ 100,000 or some such large number to dispose of a used pool table worth around $ 6,000.   

On one assignment where we were doing a Business Process review we discovered a complex process to govern ( police ) discretionary expenditure of some $ 250 a quarter at a cost far exceeding the $ 250. 

By any measure this sad state of affairs is not unusual, yet very few companies pay any attention and most are not prepared to have an independent review done. 

They believe that there were good reasons for existing processes and procedures and that almost everything, so why mess with it.     

In some cases there might have been good reasons for specific processes and procedures, at some distant time in the past but the world has changed and so has business. 

There are always costs associated with establishing, implementing and then administering processes and procedures. Some people even believe that new automation of these will save money but unfortunately experience shows this to be an illusion. 

As organisations grow, the hidden cost escalates and in addition to direct cost will always result in a range of unintended consequences.  

To show how bad this can get I am sharing an analysis I did on a local council complaints procedure. 

Complaints Management Process

Complaints (Administrative Actions) Policy & Procedures  (C(AA)PP) 

This is a 24 page document that refers to 17 Acts comprising of 1802 Pages

These 17 acts Refers to an additional 236 acts comprising an additional - 2472 Pages

At this point we have a total of 253 Acts and 4298 pages of legalese - and this is not 100% complete.

The first two Acts, from the above group of 236, refers to an additional 152 Acts and I gave up counting the additional pages at that point.

How are we supposed to counter this level of insanity I why should it be necessary?

Yet this council is comfortable that they have covered any and every eventuality to "legally" reject any complaint that might be received.

They have no interest in dealing honestly with anybody, thus the deceptive 24 Page Procedure to achieve an outcome under their control, is deliberate in my opinion.

The effect of this is to prevent any complaint from being resolved in anything resembling a reasonable timeframe, unless it is a trivial matter.

Any complaint that they perceive as a challenge to their actions will go down the rabbit hole of acts and pages of legal jargon designed to stall the process "legally" and to  reject the complaint "legally". 

One of the really silly ones I encountered was a response to a complaint where they asked the person who submitted it to prove that they were "an affected person".  

Not paying attention to these matters can sink or significantly hold back your organisation because, it is not the big that eats the small, it is the fast that eats the slow.

In light of this, maybe you might take an interest in reviewing your business Rules, Regulations, Processes and Procedures.

You could even name it the Rules (Administrative Actions )  Regulations Processes and Procedures review or R(AA)RPPR for short.



Philip SmithAuthor:Philip Smith
About: Philip specialises in getting projects and businesses that are not performing as well as expected, back on track.
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