A peer had a great insight that she shared this week:

“When I first arrived, I realized that all of our policies and procedures were built around catching the naughty 10%, which simply lowered the performance of the other 90%”

It is a statement that I have often thought about, but never articulated as well. In reviewing policies/procedures that I have seen over the last 6 years inside organizations, it would seem that this is the status quo in companies that are bucking under the weight of too much internal process.

Consider the case for contact management strategies in sales organizations. Generally, these strategies are built with a goal of ensuring that the salesforce keeps in regular touch with a client ‘X’ times per year or is built around some type of end goal such as:

At the end of 3 years we have a contract renewal, therefore at month 18 we must send out a letter, at month 20 we must meet with them and review this PPT, at month 24 we must have 1 executive meeting …. etc.

The problem being that if one were to step back and look at many of these processes, good sales teams are doing this as a matter of course and do not need the prompting. The only value that the process brings is another data point for central management to review, with questionable correlation to an improvement in sales.

This is in direct contrast to a sales basic, such as forecasting, which drives many productive outcomes such as resource allocation, executive focus to support good or struggling scenarios, inventory levels, etc. That being said, I can see how even forecasting can fall into this trap. I have read more than my fair share of articles on how large sales organizations dealt with the financial crisis (and experienced it). Many implemented draconian rigour such as world wide weekly or twice weekly forecasts with the following impacts:

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  • The sales organization spent less time selling and more time working on recasting the same information that probably had not changed much. It reduced sales productivity.
  • Central management acquired an illusion of control by being busy, by feeling that they were closer to the minute by minute action. When the reality is that nothing changed. Most did not react faster, in fact they probably reacted slower as a reaction was even harder to do as they were too buried in the details to see big trends or too resource constrained due to the additional process load.

Therefore, I have decided on a new litmus test for policy and procedure approval/rejection which will center around a single question:

• Is the policy/procedure designed to capture the ‘naughty’ 10% or does it raise total organizational performance?

If it is centered on the bottom 10%, then it needs to be rethought. It if raises total performance, then it is worth considering.