Montreal has many wonderful bakeries. There’s one in particular that we like in a strip-mall in the West-Island near our home. As chance would have it, its parking lot adjoins that of another strip-mall where my barber has his shop. While the two parking lots are side-by-side, the owners (of one or both strip-malls) have erected a large concrete barrier, preventing people from crossing from one lot to the other.
Perhaps it’s just pissing on one’s turf, or maybe it’s a reflection of practical concerns such as the small lot being filled up by the parking overflow from the larger one. The latter seems unlikely though, since every time I’ve been there (at varying times of day and days of week) both lots have always been half empty and with plenty of parking for the customers from each strip-mall.
Now here’s the problem: To get from one lot to the other is a rather complex affair of negotiating heavy traffic, major intersections and slow-changing lights. If I’m in a hurry, I won’t take the time to drive from one lot to the next, and will generally forego buying products from that bakery. If I could simply have driven my car across the two lots, the bakery would make more sales, and vice-versa, the strip-mall would benefit when I was at the bakery and needed something from one of their vendors.
If you take the time to look around you every day, you will find dozens of examples of barriers that businesses impose on their customers, often completely unintentionally and counterproductively, that limit and impede the potential interactions and transactions that could have occurred if those barriers had been removed.
One of the things we look at when we do company turnarounds is these self-imposed hells. All businesses, over time, pick up a lot of what I call, elegance, i.e., complexity intended to solve a problem that eventually acquires a life of its own, even when the problem is no longer there.
Here’s a good example: One of our major clients was losing lots of money. As we looked at their structure, we saw one position in Accounting, dedicated to reviewing in detail, everyone’s expense reports (they had more than 100 employees). When I asked why we needed this position, I was told that one senior manager had once caught an airline ticket error on one of his employee’s expense reports; a double booked ticket costing about $700. He lobbied for a position to verify all expense reports from that point forward (this had been going on for 5 years). When I asked the person doing the job how many errors he caught in a year and their value, he replied, “Two or three with a value of about $1500”. But this guy was being paid a salary of $35K a year….to catch $1500 worth of errors! Over 5 years, the company had paid more than $200K (with social benefits) to catch $7500 worth of mistakes!!!!