Monday, May 16, 2011

No Brainer Decisions

Just watching a story on CNN about a man with a 4 cent (yes $0.04) tax bill and since he didn’t pay it for several years they are trying to collect $200 in penalties and late fees.

This kind of obvious craziness happens all the time in a bureaucracy where decision-making authority is held at too high a level. Shouldn’t the lowest level clerk have the discretionary authority to fix this instead of having an IRS agent deliver the tax bill?

Why is this an issue worthy of discussion; more importantly do you have the same kind of silliness costing your business? Driving up costs by diverting necessary assets into spending more in time and effort than the return is worth?

At the hourly rate for the lowest level IRS clerk who has the file on the 4-cent underpayment, the time spent on this file has to be orders of magnitude above the recovery amount. Holding the discretionary authority to just write off the $0.04 above that level wastes the time of both the clerk and the people chasing down that payment.

Is your organization wasting the manager’s time authorizing deviations from regular policies that are so simple that the lowest level clerk should be making that decision? Not only are you wasting time the more senior manger could be spending on other issues, the clerk could be helping someone instead of dealing with this no-brainer issue.

Your customer knows that the four-cent problem should be a no-brainer and the fact that your clerk has to get permission for something that obvious makes them wonder if they really want to do business with you.

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