Dealing With Entrenched Policies & Procedures
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Dealing With Entrenched Policies & Procedures

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Owners and managers are often their own worst enemies when it comes to recognizing what I call Rube Goldberg policies, processes, and procedures (RGP3 for short). ...

Owners and managers are often their own worst enemies when it comes to recognizing what I call Rube Goldberg policies, processes, and procedures (RGP3 for short).
What exactly are "Rube Goldberg" policies, processes, and procedures? Rube Goldberg was a twentieth century cartoonist, famous for inventing complex devises to accomplish the simplest of tasks. He was the inspiration for the 1960s game Mouse Trap.This article suggests an approach to recognizing and addessing these inefficiencies.

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  • 1. We Have Met the Enemy andHe Is Us:DEALING WITH ENTRENCHED POLICIES, PROCESSES &PROCEDURESStudents of American pop culture will recognize the title as a quote from Pogo, the swampdwelling possum in the classic comic strip of the same name. I use it to introduce adiscussion of an all-too-common business phenomenon. commonOwners and managers are often their own worst enemies when it comes to recognizingwhat I call Rube Goldberg policies, processes, and procedures (RGP3 for short). short)What exactly are "Rube Goldberg" policies, processes, and procedures? Rube Goldberg wasa twentieth century cartoonist, famous for inventing complex devises to accomplish thesimplest of tasks. He was the inspiration for the 1960s game Mouse Trap.Michael Hammer gave a perfect example of a modern day business mousetrap in elReengineering Work: Dont Automate, Obliterate. A company required that the "corner Obliterate.desk" approve all overseas invoices. The policy had been in place for many years. It turnsout it originated back when many customers were French, and when an employee who was ginatedfluent in French occupied that desk. However, the employee had long since left, and fluency long-sincein a foreign language was not a requirement for assignment to the desk.In other words, the original value of the policy was lost long ago. All that remained of the helegacy were unnecessary costs and shipping delays.This example exhibits several common characteristics of RGP3s. Those characteristics mayinclude: • They are overly complex for the intended purpose. their • They involve outdated technology. • They are not integrated with other systems. • They involve manual input of paper records. • They are labor-intensive. intensive. • They are non-scalable and unable to keep up with demand. scalable
  • 2. • They are poorly documented. • They have been in effect for as long as anyone can remember.In other words, they are inherently inefficient and outdated.Yet with all these negative attributes, RGP3s seem to enjoy a sort of sacrosanct protection.Decision makers are reluctant to identify, let alone change them. Perhaps like an old pair ofshoes or a childhood tradition we cling to in adulthood, we take comfort in our inability toremember life without them, even if we outgrew them long ago.Although my RGP3 experience is mainly in finance and accounting, I am certain they exist inall areas of company operations including production, distribution and customer service.So what is a manger to do about them?First, be open to the possibility of their existence in your organization. Every company hassome areas that need improvement. You cannot assume that something is "best practices"simply because it worked in the past. If a department is unable to keep up with currentworkloads, there are only two possible reasons. Either they are understaffed, or they areoperating at less than peak efficiency. Adding staff adds costs. Improving efficiencies islikely a cheaper and perhaps faster alternative.All successful organizations eventually reach a size where managers are not expected to befamiliar with the application of every policy, process and procedure. Even if they are, RGP3scan be virtually invisible to the familiar (or complacent) eye. That suggests one of twopossible approaches.The first approach is to constantly challenge and encourage employees to identify efficiencyimprovement opportunities. Maintain an open and direct line of communication throughbrief but regular interaction. Actively solicit employee input and implement at least oneidea every month. Publicly reward accepted suggestions in ways they value. That may meanan employee of the month plaque in the lobby, a front row parking spot or an AMEX giftcard.Unfortunately, relying solely on employees willingness to point out flaws has a majorlimitation, human nature! People seem to have a tendency to accept most things as theyare. Furthermore, asking questions and challenging the status quo may be viewed as careerlimiting in some corporate cultures. That is not to suggest people are by nature lazy orapathetic. Its just how things are.The second approach is therefore to bring in a fresh pair of eyes. A while back, I shared astory about an experience in a new job. On my second day, I was reviewing a lengthypayment report when I spotted something unexpected. About every 20 pages or so, therewas an entry with a negative amount. Based on my still limited understanding, there was no 2
  • 3. reason for negative numbers. To make a long story short, I had stumbled across an internalcontrol weakness that allowed certain items to be paid twice.The point is that other people who worked with the report every day had undoubtedlynoticed negative entries before. Yet they failed to follow through with a few simplequestions. If they had, they might have closed the control weakness years earlier.In closing, let me clarify what constitutes a "fresh pair of eyes". It may mean a consultant.This outside resource could be an expert in your field, or someone well versed in commonbusiness practices and operations. An auditor or independent CPA with other clients in yourindustry may be a valuable resource, especially if the area of concern is one they review aspart of their evaluation of internal controls.In my example, a fresh pair of eyes merely meant introducing a new employee into the mix.Either way, the path to improved efficiencies in your business may be as simple as findingsomeone unburdened by the "But weve always done it that way" mentality.That mindset, Mr. Pogo, is the real enemy. © 2012 by Dale R. SchmeltzleAbout the author: Dale R. Schmeltzle, CPA is a founding partner of CFO America, professionalconsultants dedicated to helping business owners define, implement and monitor the strategic andtactical elements necessary to achieve long-term financial and operational success. CFO Americaprovides fractional or part-time executive management expertise not available on an in-house basis.Dale has been a frequent author and speaker for numerous professional, civic and non-profit groups. Hewrote Highly Visible Marketing, 115 Low-cost Ways to avoid Market Obscurity. He has also taughtcollege level accounting and financial courses to non-business audiences. For more information, pleasevisit http://www.CFOAmerica.biz or follow us on Facebook at http://www.facebook.com/CFOAmerica. Consulting CFOs & Executive Managers 3