Blog

One of my business mantras is: “Deconstruct, Simplify and Document”.

So many companies develop highly complicated systems to track performance at the wrong level, or have systems that span the dawn of time and layer complication on top of complication.  These systems might keep the ship going in the right direction, but is that what we’re trying to accomplish? Just stay the course?

To simplify this discussion, let’s add an example. We’ve all heard of a “Rube Goldberg” – a contraption that is deliberately over-engineered to perform a simple task. Yep, the simple task is completed – taking a marble from a starting point to the finish. But, the contraption takes up way too much space, takes infinitely more time than a direct path to complete the journey and requires an “engineer” to fix all the breaks in the structure to keep it working. There’s a reason people use the term “Rube Goldberg” to describe complexity and inefficiency.

Here are some simple steps to evaluate inefficient systems:

• Block one hour on your calendar once a month.
• Pick one process to evaluate in one department you manage.
• Identify how long it takes to accomplish.
• Identify the staff count to complete.
• Determine how long each process has been in place – the longer something has been done the same way, the more opportunity for re-engineering.
• Evaluate the end result. Is the product correct, does it need to be tweaked after it’s produced, and is the end product adding the correct value to driving behavior that drives revenue, profit and margin?
• Once you establish an efficiency baseline for that function, run it though a simple deconstruction checklist:
  1. Can it be done more quickly?
  2. Can it be done with less staff?
  3. Is it adding value in areas the company needs?
• Poll your staff, call your peers, call your banker, call your accounting firm, call your Uncle…call your resourcesto see if they have any ideas on how this process can become more efficient.
• Interview your internal customers and determine what they want.
• Hire a consultant to help with the redesign, if that makes sense.
• Put your best CFO analysis foot forward to posit what YOU think is best – make a decision and run with it.
• Once it’s Deconstructed, and you Simplify it, Document it and roll it out.

Here’s a quick, simple,example. For years, time was spent producing a time-sucking, life-blood draining report with infinitive detail. Internal customers thought they wanted it. Problem was, it was so detailed, it overwhelmed the eye, the head, the daily calendar (and the human psyche?) By pulling a data report and adding a quick margin calculation formula, areas that went off the tracks jumped out. Time saved building a detailed report was redirected to researching trouble spots. Exception reporting – not detailed reporting. Voila!! Time saver – you bet.

I have oodles of examples that are closer to tearing down the Berlin wall and creating an entirely new country.  That’s what it feels like initially. But the results are always worthwhile.

And remember, thinking is not doing. It doesn’t have to be perfect – perfect prevents progress (the next blog). You’re bound to hit pay-dirt with at least running some processes from this checklist.

Excuses (You know you have them):

If it’s not broke don’t fix it;

You don’t have time;

We continue to bring money to the bottom line;

Margin is holding steady;

Revenue hasn’t declined.

Beep, beep, beep. Is the BS buzzer going off? Inefficient systems keep us working, but they also keep us from working at a higher level. Push through those excuses!

There are plenty of businesses that continue to bring money to the bottom line.  Businesses where staff manipulate data instead of interpreting data. Where  databases aren’t talking to each other and sharing information.  Where information critical to evaluating performance isn’t available for the appropriate internal customers. The ship is moving forward, sure, but at what rate of speed?

The CFO role is NOT about status quo. We need to keep the ship going in the right direction, true. We must also look at ways to add a turbo charged engine to thrust processes, accumulate data, report and analyze at a new level and be part of charting a new course. Simplify to innovate.

“Experience breeds wisdom, and wisdom breeds vision – Dalai Lama XIV”

www.cfowisdom.com