4 easy-to-spot tell-tale signs you can save on headquarter costs (3)

In the previous posts, the oversized headquarters as one of the biggest organizational wastes was addressed. Oversized corporate departments are a black hole attracting valuable resources, scarce cash-flow and lots of energy.

I’d like to urge you again to consult your local managers and local HR. They can point to the waste in the organization in fine detail. But as I said, these good people are kept away from you by your army. Discuss the four topics in these posts directly with your local management. If they experience (one of) these, you know where to improve your organizational efficiency.

In this post I’ll address the third topic – data requests by corporate. You know you have considerable waste in your organization when:

corporate regularly asks for additional data that has to be gathered manually locally.

To give you a real-life example: in a big international organization, local entities get a new request for information from corporate. This request is outlined in a three-page email which:

  • explains in excruciating detail who has to submit what to whom before which date;
  • contains a 10-slide Powerpoint with intricately designed multi-colored pictograms showing how this data request fits in the global strategy;
  • lists instructions on how to fill the data request template containing detailed definitions attempting consistent data submission across all entities;
  • for that same purpose it also has elaborate scoring matrices to classify the data in pre-set categories, not allowing local entities to deviate, even if they don’t have the data available according to those categories, or when the categories don’t make sense for their local situation.

Most top managers like as much kpi’s and data as they can get their hands on. It gives an (often false) sense of control. Yes, you need the right kind of information to base good decisions on. But you need to weigh the amount of effort put into data gathering against the benefits. Often people don’t realize how much time and energy is spent on data gathering. Even when there’s a good ERP system in place.

To give you an idea of the time spent on a simple data request, know that for every hour per month that local managers spend on generating these kind of reports for various corporate departments, they need an exponential additional amount of time for:

  1. answering questions that come up because the data is being (pre-)analyzed by people who don’t understand the context;
  2. arguing to adjust the conclusions the analyzers wrongfully draw from data they still don’t fully understand;
  3. influencing the inevitable catastrophic decisions coming out of those wrong conclusions;
  4. when bad decisions are made on the basis of wrong conclusions, they need to adjust those decisions creatively, in order to implement something workable for the local organization;
  5. during implementation they need to have endless conversations with employees to keep them from becoming fully disillusioned with the useless changes, to keep attrition down, while maintaining focus on the business goals they have to achieve despite the new changes;
  6. reporting progress back, restarting the cycle at 1.

Solution

Check with your local management what kind of data requests they receive, whether they serve any real purpose, and if so, whether the time spent on it (both locally and corporate) justifies the benefits. Cut those requests out when:

  • they are even half as elaborate as the example above
  • local managers spend more than an hour per month generating data and reports for various corporate departments
  • you hear stories about managers who, with a tired voice, ask their people to just submit invented or senseless data, because otherwise their department will look bad when corporate shows red crosses in the overview report every month indicating they have NOT YET submitted the required data (and remember, don’t blame the managers for this behavior, blame the corporate departments that put this kind of pressure on local entities)

For other savings, keep your eyes peeled for the next and last post!