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The Roots of Business Inefficiency

When it comes to business mistakes, those who do not understand their history are doomed to repeat it. Inefficiencies — particularly severe ones — don’t just appear out of nowhere. With 20/20 hindsight, you can often clearly see how your organization ended up making a particular decision or found itself in a given situation.

Knowing how you got where you are doesn’t give you a crystal ball for predicting all future inefficiencies, but it does provide some serious insights to aid you in moving forward.

For example, if your computers weren’t upgraded for 10 years because the CEO himself doesn’t have a computer and didn’t understand the difference, delegating future technology decisions to a trusted but more tech-savvy manager can help the company make better-informed choices going forward.

When you find yourself evaluating a business process for improvements or solutions, it can be instructive to work backward and find out how it came to be this way. You can research a given process’s history by talking to current or even former employees.

If you really want the scoop, look to veteran employees in other departments who may have domain knowledge — particularly the receptionist and the accountant, who usually have the strongest and most perceptive memories.

The following sections describe the main culprits usually found behind major inefficiencies.

Not keeping abreast of new technology

This is far and away the most common situation, because it’s very hard to know what you do not know. (It’s also the biggest benefit to hiring the right outside consultant, who has constant exposure to and experience with tools and processes you may not even know exist.) It’s a particular problem in older and/or low-tech businesses with fewer opportunities for exposure to new innovations.

Failing to communicate

When employees or divisions within a company make decisions in a vacuum, it often creates a cascading effect across the entire organization. The sales team switching to a new CRM software meant the support team had to log in to two systems simultaneously to see customer phone numbers. Clearing out the storage room for the cleaners left manufacturing without spokes for a day because they couldn’t locate them.

Forgetting your company’s history

If this is the year your company goes paperless or switches to electronic billing, it’s important that next year, everyone remembers this. Too often initiatives conclude or cheerleaders leave the company and those behind slowly forget why a decision was made — or that a decision was made at all.

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