Thursday, October 11, 2012

How Do I Lie to Thee? (Part 2)

I had quite a list the other day of the ways we add costs to our operations through distrust, lies and deceit. I'm sure you thought of many other cases. At the end, I'll encourage us all to make changes so that we can reduce our expenses. Here are a few more ways it costs us a lot to operate a business:

  • We maintain elaborate time-keeping systems because we don't trust people to give an accurate record of the time worked. We have supervisors and managers 'running around' to verify and approve the time cards, time sheets, and other mechanisms. In the professional services, we have people report to the nearest 'fifteen minute mark' exactly what they're working on so that we can precisely bill (and frequently overcharge) our clients. You know it's often overcharging because the time is rarely rounded down--e.g. 19 minutes always becomes 30, rather than 15.
  • We lie to our employees so that false information gets to the competition. "Yeah, business is going well. We've landed several new clients..." Because they think business is going well, they don't look as hard for opportunities.
  • We lie to suppliers to get bigger discounts or better terms. In response, they might match prices or terms or delivery requirements but it'll mean they're less secure. If they go under, then you've incurred costs to find and qualify new suppliers. Also, if they don't go under, they're going to inflate their offer so they have room to negotiate. If they can cut prices deeply, don't you wonder if they've been enjoying huge profits on your business in the past? Have they been lying to you about not making any money on your sales?
  • We lie to customers about "Made in America" and at the same time, we have sourced the manufacturing of many components and sub-assemblies to off-shore locations. We legally meet the criteria to say that it's domestically produced, but that's just legalism. In the meantime, we have administrative efforts keep track of this, file the paperwork with Customs, and double-check all this in case some investigation finds out we might be falsely making the claim. (I saw recently that the Toyota Camry is the most US-made car being offered right now--not Ford, GM or Chrysler. Go figure.)
  • We have to check our suppliers good and services because we don't trust that they're meeting specifications. Likewise, our customers do the same. We certify that our stuff meets the requirements. I've known too many companies who don't even check to see if they're in compliance with all the requirements. They/We assume that the product meets those particular specs--and no one's checked it yet. When it is checked or a problem occurs, then all kinds of expenses are incurred to audit, test, requalify, recall, and rework lots of product. Also, don't forget there is a loss in sales revenue when customer confidence drops.
  • If you're advertising looks too good--airbrushed models, mashed potatoes instead of ice cream, school glue instead of milk--consumers may not trust your brand. You lose.
  • And then there's the little games we play: leaving a coat in the office and the screen active so people think you're around when you've left to go to the coffee shop for the next few hours; carrying a stack of papers so people think you're on a mission or heading to an important meeting but you're really just unwinding by getting a bit of exercise; extending breaks by talking to someone else about something that might be considered work-related so that it's 'not really a break'.
All of this erodes cohesiveness in the organization. The great 18th century poet Samuel Johnson somewhere said something like 'even demons don't lie to each other otherwise the whole efforts of hell would break down'. (I tried to find the attribution and exact quote but failed.) A corporate culture that perpetuates the types of behaviors above is less effective than it could be. In order to build trust, you might have to first ascribe trustworthiness to others first. Trust your co-workers and staff more than you trust your nameless brake mechanic. Start offering the best deal to your customers. Give people the benefit of the doubt. Some people will take advantage of you, but almost all people will respond in kind.

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