How much are you losing everyday? The power of deciding now
One of the best testimonials that we ever received from a customer is this: a couple months after deciding to implement Visual Planning, the business unit head of a very, very large global business called our CEO to say that they had uncovered one million dollars’ worth of operating losses due to errors and inefficient processes, that they couldn’t possibly have evidenced it without Visual Planning and that they were in the process of resolving those. One million dollars. They had no clue that the loss existed to begin with, and each day that passed was adding a bit more water to the lake.
So he called us to say thank you. We replied, “That’s great. We’re glad you’ve decided to jump in with Visual Planning. We would love to do a case study with you so that your experience benefits other people as well.” and of course the answer was no. Their business’ reputation was at stake. Therefore, the best testimonial we ever got never made it to our marketing collaterals and website, but the story remains and our CEO is quite fond of telling it to new team members in front of the coffee machine.
The truth is, it is a strong lesson that you can apply in almost every aspect of our modern professional lives, even if you don’t work for a scheduling software company. If you put product praise aside, what remains is a story about how not changing can be hurtful, and how sometimes we do things wrong without knowing about it. Think about what could have happened to this business if they didn’t make the decision to search & implement new scheduling software, or if they just tabled it after reviewing a couple of vendors and said “we are not 100% sure yet, so let us think about it and review in twelve months”.
Psychology and behavioral economics research tells us that such thinking is part of human nature. Most of the population is described as risk-averse, which means that they would rather take less risks for a smaller gain, than take a heavier risk and win more. In simpler terms, most people just don’t like change. They prefer status quo. They find comfort in building habits and eliminating novelty from their immediate environment. This translates into our work culture and we create teams that work the way they do simply because they are used to it. If we aren’t careful enough, we create organizations that are scared to try to improve, and reward those that don’t try new things.
This also has some effects on our judgment. When given a situation to analyze and options to choose from, we tend to consider that remaining in the current state (i.e., not deciding now) is a zero-risk profile, meaning that we have nothing to lose in opting for no change or pushing the decision over to a later date. Yet the above story reminds us that this is often not true. Every day is an opportunity for additional losses or additional gains – in dollars, efficiency, customer satisfaction, new ideas, whatever your metric is.
It can be resources that you do not utilize to their full potential, skilled people that spend time on inefficient tasks such as data re-entry or counting pens, errors that are left uncorrected until it’s too late, processes that loop on themselves without resolving issues. The list goes on… When weighing options for an important decision, we should always try to evaluate the cost of not deciding today. That is: what are we losing by working exactly as yesterday without questioning it? How is it harming us? How can we measure those losses?
Identifying pains, issues and costs of the current situation is the very first step in making an informed decision. By having intimate knowledge of the actual flaws and cost of what you are doing today, it becomes easier to identify the options that directly address those flaws and will help curb those costs. More importantly, we are aware of the importance of making choices in a timely manner to stay in control, before losses start piling up. If we wait too long before making a decision, then the turn of events may just end up deciding for us. We know we might just be losing a million dollar without noticing while we’re still pondering options.