Does the drive for efficiency lead to corporate insanity?

What is insanity?

First let us consider some informal, but commonly accepted definitions of insanity:

According to Einstein, "Insanity is doing the same thing over and over again and expecting different results."

Another definition of insanity is non-sequiter responses to communication or situations

Another definition of insanity is continued non-survival behavior.

Another is the inability to understand the nature and consequences of ones acts

Still another definition, insanity is when you try to make reality conform to your views, rather than to conform your views to reality.

Dictionary definition: Insanity is the condition of the mind, when a person cannot separate reality from fiction, cannot draw intelligent conclusions …

What is corporate insanity?

For those of you who do not see where I am going with this, let me pose a few questions:

When was the last time you talked to a Customer Service Rep and got mechanically scripted answers that did not apply to your questions?

When was the last time you talked to your boss about your performance and got meaningless gobbledygook?

When was the last time you encountered the Phone Tree From Hell when you had a problem that required a human answer?

When was the last time you were in a weekly staff meeting that made no sense?

When was the last time you attempted to point out that a proposed design or product had already been soundly criticized by existing customers?

If any of these scenarios are familiar to you, you are well inside the corporate twinkie zone and you probably need a change of scenery.

How much efficiency can we stand?

In my simplistic view of the world, actions either make things better or they make things worse. I realize that this is not sufficiently nuanced for many self-professed experts, but it’s something I can observe and measure, so it works for me. As a result, I believe organization is a good thing, unless carried to the point where you substitute machines or fixed procedures for people communicating to people.

Once you get organized to the point where individual decisions are no longer permitted, except at the topmost levels, you have essentially recreated the Soviet Union in all of its glory. This is not a recommended solution.

The random problems posed by the real world will overwhelm the ability of a centralized system to handle incoming traffic and the system stalls or goes psychotic. Unfortunately, by then the customers have gone psychotic and left for saner suppliers.

There are several ways to address this problem of corporate efficiency without recreating the nightmare visions of I, Robot (2005) or Metropolis (1926), but it requires more space than I wish to burden you with at this time.

I have already written about other aspects of this in Avoiding Corporate Meltdown and Higher Speeds = Corporate Meltdown.  If you have not read them, you might find that they describe situations you are currently facing.

I will try to wrap this up in the next few posts. Stay tuned if you find this interesting.

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0 Responses to Does the drive for efficiency lead to corporate insanity?

  1. Jane Chin says:

    Amen! Recently I had a question for an online banking merchant. I asked a fairly simple question (“What is the FDIC insured amount for your money market accounts?”) that I assumed would draw a curt answer (example: “$100,000. Thank you for doing business with us, we love you.”) Instead I got half a page of some policy that was cut and pasted from elsewhere on the website, as if I wasn’t smart enough to have looked there already!

  2. Jane Chin says:

    (P.S. I still don’t know the answer, but from my email correspondence experience, there’s no way I’m braving a telephone query.)

  3. Frank Martin says:

    I’ve lectured managers on this subject many,many times, and it goes something like this:

    Companies fail because they often forget what business they are in. Airlines are failing, not because some Airlines are bad or the air travel busines is by its nature unprofitable, but because those who run airlines only want to be responsible for part of what airlines do for the customers. Airlines are remarkably good at doing the “flying” part of their business, but they fail consistently to understand that customers are paying for the entire experience, from purchase of a ticket until they show up at grandmas house on the other side of the country. Airline customers evaluate airlines for the entire experince, no just the part where the big metal tube moves mysteriously through the air.

    Airlines continue to do battle with each other on the one part of the business for which competitiveness is not an issue. Almost all airlines fail to approach their business from the perspective of the customers experience.

    Why? Because no airline wants to take a chance and step out from the herd. Leadership from companies that live within established industries are often driven out of those companies rather than encouraged to thrive.

    Individuals, companies and their industries need to take chances and as a result redefine the problem so that it can actually try a solution rather than simply accept things as they are, saying that it “can only be done one way, because its always been done this way”. This is the “death rattle’ of an ossified business.

    Older intrenched industries often fail to remember what it was they did in the market in the first place. Airlines were first and foremost about convienence and speed. Today, Airlines all suffer from support systems that destroy thier speed advantage. Yet almost none of them are working to solve that problem.

    Let the Airlines and their industries decay serve as a warning. You and your industry can also become complacent, accepting by default how things are done today as the only way they could be done. The result is not that your company will get by but your industry will collapse around you just it as for the once glorious Airline industry. Chances need to be taken, leadership needs risk and everyone needs to not accept the status quo in order that progress and growth be achieved.

    Be careful, because you too can find yourself arguing for the justification of a 45 minute line just for a customer to check luggage, forgetting that it is your customer who is standing in that line, wondering why.

  4. Corporate America is quite “sane” by any definition. Executives behave exactly as their owners want them to, or they are out. Nothing will change until investor expectations change.

  5. Mechanically scripted answers are a bad thing? Just kidding, this is a very insightful post! Part of the problem for why we have scripts is because some cannot even reach the minimum standards of using the client’s name when calling in for help, or businesses hire someone who is in WAY over his/her head and because they want to “save money” they put the lowest priced employee on the front lines to take that first call, and love metrics like “first call resolution” when “resolution” means a closed call. Any one metric can be quickly cheated, so measure all over the place to get a real feel for things. And don’t worry so much about what the stats say. Ask the tough questions of your associates and your clients, like “Are you satisfied with the answer you gave/received?” and “What can we do better next time?” Great stuff, as always! Thanks!

  6. Richard must be part of a Corporate America in an alternate universe!!

    My personal experiences with IBM, Sun, Taligent and twenty-five other companies has shown me that there are pockets of unbelievable insanity in almost every company.

    Owners (investors) want results. Executives strive to produce those desired results by creating more efficient corporate structures and procedures.

    It is the reliance on mechanistic models of perfection that create the corporate insanity I have experienced.

    Investors are totally right in demanding financial results. It is the failing by management to include the human costs of a particular approach that creates the insanity.

    When the human cost in terms of pollution, employee injury and illness, and customer inconvenience are ignored, a reaction is generated which eventually impacts the bottom line.

    For example, deciding not to protect employees from black mold infestations in Research Triangle Park offices was probably not a decision made by IBM top management, but it affected fifty lives, some of them fatally. Somebody decided that it would be more efficient to cover up the problem rather than deal with it. It is still being covered up.

    In a smaller or larger scale, these same insane decisions are made every day, if customers, employees, and the population at large are not considered in making corporate decisions. No company is immune to this insanity. Where the corporate culture is sane, these areas of insanity stand out and can eventually be eradicated.
    —–
    PING:
    TITLE: Insane Corporate Efficiency
    URL: http://www.synthstuff.com/mt/archives/individual/2005/06/insane_corporate_efficiency.html
    IP: 63.247.132.12
    BLOG NAME: Synthstuff – music, photography and more…
    DATE: 06/24/2005 12:54:00 AM
    David St. Lawrence writes at Ripples — a blog I read several times a week. He was involved in business management and is now semi-retired, working for his wife’s woodworking business and has just had his first management book published….
    —–
    PING:
    TITLE: Exploring corporate insanity
    URL: http://www.orangepalmtree.com/2005/06/exploring_corpo.html
    IP: 66.151.149.17
    BLOG NAME: Orangepalmtree
    DATE: 06/22/2005 09:48:02 PM
    I point you to two posts (part one, part two) by author and blogger David St. Lawrence on how the drive for efficiency can lead to corporate insanity. Are corporations insane? Consider these scenarios from David:When was the last time

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