Inefficiencies are costing businesses billions of dollars per year

Inefficiencies that are commonly associated with large businesses are costing billions of dollars a year. These include but are not limited to ineffective meetings (up to $283 billion), bad writing ($400 billion) and workplace conflict ($359 billion).

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Carly Sembre
March 30, 2022 10:20 am

I can vouch for bad writing being a major hindrance to productivity. I notice that staff who are the busiest (or staff who say they are the busiest😉) send the worst emails. Sometimes I get emails from someone who signs off by spelling their own name incorrectly. Other times I get emails that are barely decipherable. At times like this I’m in a dilemma because I want clarification but I also don’t want to disturb them because they are so busy!

My biggest annoyance is one that must be costing businesses thousands of hours of lost productivity. When I write an email to someone that has several questions, I list the questions in numerical order:

1) Question 1…
2) Question 2…
3) Question 3…

This keeps the email well structured and the recipient can reply to each question to ensure our conversation progresses. The most annoying thing (and this happens a lot!) is when they reply with a jumbled, garbled paragraph. I now have to spend my time dissecting your email and trying to figure out which of my questions you have answered. Almost all the time in that mess of a paragraph they have missed out a question. So I not only have to figure out what you’ve replied to but I now also have to contact you again to get clarification on a question you didn’t answer.

Needless to say this is very frustrating, hugely time consuming and all the more annoying because it could have easily been avoided.

March 29, 2022 2:13 pm

Anecdotal experience in dealing with large companies leads me to believe that there’s certainly a strong correlation between the growth of a company and its susceptibility to inefficiency. I wouldn’t be surprised if there’s considerable data to support this view. There are a multitude of reasons why a large company is inefficient – below are a few of them…

Often large companies are subject to regulatory targets that compromise the organisation’s ability to operate efficiently. One example is that of call centre agents, who are encouraged to finish calls with customers within a certain time limit. Rushing through a conversation to meet that time limit can negatively affect the agent’s ability to empathise with the customer and provide a solution appropriate to his / her needs.

In contrast to a nimble start-up that can act quickly on an idea, a large organisation often has to seek approval from various teams or departments. With decision makers in these departments constantly attending meetings or having to respond to hundreds of emails each day, it’s no surprise that approval for ideas can take time. By the time an idea is finally approved by all relevant parties, the opportunity that seemed so exciting several weeks / months ago isn’t quite as appealing in the current climate.

It’s interesting how behaviour within an organisation can mimic that of tribal society. Endless alliances, disputes and vindictive actions were symptomatic of tribal societies hundreds / thousands of years ago. Whilst certainly not as macabre as our tribal ancestors, the modern alliances and disputes, often referred to as ‘office politics’, can permeate large organisations at all levels. The inability of different departments within a large organisation to work well together can impede the delivery of even the simplest of actions.

Ultimately, we’re all human. We make mistakes and we hope to learn from them (though in dealing with some large organisations, it seems to me they do more of the former and almost none of the latter). A missed email, punching in incorrect data or misinterpreting a message can all lead to inefficient outcomes.

With the existence of the above and innumerable other reasons that make large companies inefficient, the upside is that there’s likely an opportunity for a hungry start-up or competitor itching to resolve those inefficiencies. Yahoo! was perceived as unstoppable in the late 90s, then along came Google. The downside is that if the large company lacks competition or is a monopoly, it can be mind-numbingly frustrating to deal with the company’s mistakes, which on the surface are basic errors that could be resolved in a matter of minutes. Just this week I’ve had to deal with a large company that’s provided me with an incorrect refund amount, another large company that’s lost my paperwork and is ‘very apologetic’, and another large company that is incapable of responding to me after 2 months of attempted contact by phone, email and post. Endless fun… 😉

Nicole Stratton
March 31, 2022 8:38 am

How about fragile egos and the artificial hierarchies that exist in organizations? I wonder how much this is costing businesses. When you send a group email in your organization, chances are that you list recipients in order of seniority. Maybe the director comes first, then the managers, followed by senior and junior staff. I do this. And it’s a noticeable trend in the emails I’ve received during my career. Now this is the crazy part.

I was listening to a podcast about unspoken rules of work and I guess this is one of those rules. In a law firm a group email was sent, and the most senior person in the recipient list wondered why he had been listed after someone in a less senior position. No joke – this caused chaos behind the scenes.

How fragile are egos in these corporate environments that you feel upset because someone is listed before you in an email!? Do you really think you are that important? It’s childish behavior and it wastes company time and money because you can’t keep your ego in check.

Ernest Vicente
March 31, 2022 11:19 pm

All these things cost businesses a lot of money, no doubt. We are human, though. To put it bluntly, this means lots of inefficiencies come from mistakes, stupidity and incompetence. How many times have you wondered how someone got to a senior position in a company despite having a reputation for incompetence? How did that person even get past their interview? We’ve all thought that about someone at some point. If you’ve wondered how a business could have made such an obvious error in judgement, you’re not alone.

When Burger King tweeted “Women belong in the kitchen” as part of an International Women’s Day campaign, many of us wondered: “Surely someone in the company thought this was a bad idea“. Mistakes are a part of life. It’s the unnecessary, avoidable and down-right silly mistakes that hurt companies, either financially or reputationally. Back in the day I used to watch MTV quite a lot. I remember a no-smoking campaign they ran during ads in which a bunch of celebrities were singing “no, no, no” to smoking. Then the Real World came on. And what were they all doing? Smoking! You couldn’t make this stuff up. How could MTV be so foolish? Back then, reality TV was quite new. Kids looked up to the characters they saw on the Real World. I know I did. I related more to them than some celebrity I saw in a music video. There must have been someone at MTV who thought… “Ummm, we’re running a campaign to stop smoking, but we’re also showing these Real World characters smoking. Maybe we should do something about that.” However much money they paid these celebrities to sing about no-smoking, it would have made no difference if they threw it down the drain. Their message was nullified the moment the Real World came on.

Burger King - International Women
Fabian Bosiger
May 22, 2022 5:03 am

Some of the greatest inefficiencies in business come from the top management losing touch. A CEO surrounded by yes-men and yes-women is a frequent occurrence. I once listened to a lecture by Sonny Vu, the former CEO of Misfit, a wearable tech brand, explain that while he was CEO of Misfit when it was a start-up, he might not be the right person for CEO when the company grows into a fully-fledged business. It was refreshing to hear. Similarly it was refreshing to read the letter of Zhang Yiming, former CEO of ByteDance, to his employees. His statement, “The truth is, I lack some of the skills that make an ideal manager” is a rare act of humility for someone purportedly worth $50 billion.

On the flip side, when the newly-launched Snapchat was encroaching on Instagram’s success, Kevin Systrom, former CEO of Instagram, was adamant that Instagram wouldn’t copy Snapchat’s features. He had a particular vision of Instagram that didn’t adapt with the times, to the point that staff started scheming behind his back. The CEO was losing touch.

When Snapchat went from annoyance to viable competitor to existential threat, Systrom was forced to reconsider his resolute position. According to Sarah Frier’s book No Filter: The Inside Story of Instagram, Systrom was also worried he’d get fired if he didn’t nip the threat in the bud. When Systrom finally decided to introduce Stories to Instagram, one exec described the inspiration as similar to John F. Kennedy’s “We choose to go to the moon” speech in September 1962 at Rice University.

Although Snapchat was and still is a threat to Instagram, I can’t help but laugh at Sarah Frier’s description of Evan Spiegel, the CEO of Snapchat. Narcissistic, egotistical, running the company according to personal taste over what’s good for business are some of her choice words. Like the CEOs alluded to at the beginning of my post, Frier says Spiegel was surrounded by yes-men and yes-women who thought they would get fired for disagreeing with him. Instagram and Snapchat – not so different after all.

Hussaini Azri
May 8, 2022 6:59 am

Add cultural misunderstandings to the pile, especially for multinational companies. A company that does business outside its country’s borders must understand the risks that can happen from cultural blunders. The mascot of CIMB, a Malaysian bank operating in ASEAN, is a red octopus. When CEO Nazir Razak was given a fluffy octopus doll to examine, he told his marketing staff to distribute the mascot across ASEAN. A little later after the doll had been sent to different countries, Razak was informed that the octopus is the symbol of a corrupt politician in Indonesia 😳

When KFC first came to China, they didn’t double check the translation of their famous slogan, Finger Lickin’ Good. They promoted KFC in China with the slogan, Bite Your Fingers Off. I like KFC but I don’t want to bite my fingers off 😆 A funny blunder was done by Electrolux, the Swedish vacuum cleaner manufacturer. Their slogan was intended to explain that their vacuum cleaner is very powerful. Unfortunately when translating their slogan into English, they made the hilarious blunder, Nothing Sucks Like an Electrolux. Their vacuum was probably quite good but their slogan sucked!

A badly translated slogan won’t ruin a company unless it is really insensitive. However it is the cleaning up (Electrolux pun) of a badly applied campaign that creates unnecessary work.

CIMB octopus.png
Alex Bakalov
April 27, 2022 2:55 am

Office politics. Someone throwing a tantrum because they weren’t listed first in an email is the epitome of office politics. Through and through, office politics waste an inordinate amount of company money. Trying to get ahead through manipulation, lies and and game-playing is a recipe for disaster. This is exemplified by the well-documented history of Twitter’s acquisition attempt of Instagram. Twitter first wanted to acquire Instagram for $20 million. Kevin Systrom, the founder of Instagram, was receptive to this opportunity. Dick Costolo, the CEO of Twitter from 2010-2015, was tentative about it. Not because of the value Instagram provided, but because an acquisition of Instagram driven by Jack Dorsey (also known as Block Head) would make Costolo look bad. Costolo and Dorsey had been disagreeing about the direction of Twitter, which turned into a full-fledged game of office politics with detrimental consequences. The acquisition of Twitter was side-lined and in a future attempt to acquire Instagram, Twitter was willing to pay more than 25 times its original offer! The office politics between Dorsey and Costolo cost Twitter massively as Instagram became much, much larger than its original $20 million valuation.