-

In Praise of Captain Obvious





Injustice.  That’s what I think about when the poor dude is humiliated every half hour on television. Why?  In real life and business management, there’s value in questioning the obvious.  Following are some examples from my practice over the years (modified for client privacy) :

·        Obvious: employees get sick, at least once every few years.  Nonobvious: Some employees went for five or ten years without getting sick (zero sick hours).  Resolution: Employees had an informal deal with their supervisor, to not report sick hours, unless it got “out of hand.”  When those employees left the firm, they were over compensated for sick leave not taken. 

·        Obvious: fixed assets cannot have a value less than zero.  Nonobvious: Good intentioned employees shifted assets and broke some of them down into more tractable components as part of a cleanup.  Inadvertently, they adjusted some below zero.  Resolution: Change the system and reporting to prevent adjustments that result in net present value below zero. 

·        Obvious: our computer system will not allow the payables department to pay the same vendor, the same amount, on the same day. Nonobvious: The same vendor can be set up twice.  For example, once as XYZ Corp and again as X.Y.Z Corp.  Similar but different.  To the computer, those two names are as different as “Hopalong Cassidy” and “Butch Cassidy.”  So, the control failed and XYZ was paid $25K twice for the same invoice.  Resolution: Cleanup the vendor master, put more controls around setup, and build a smarter duplicate payment warning system. 

·        Obvious: we should keep a little extra inventory on hand for top customers.  Nonobvious: Customer needs and preferences change. Big customer X was sure that polka dot siding panels would be popular next season. Told supplier to have plenty on hand.  Unfortunately, the customer was not able to sell the anticipated volume and did not need the extra inventory from the supplier.  Supplier was left with a glut of oddball siding which may never be sold.  Resolution: Put in review procedures.  The supplier should not allow its financials to be dictated by a customer prediction (risk management).

Wandering minds find opportunities

Questioning the obvious acknowledges that we don’t know everything.  Sometimes just looking at raw data from the business helps us build the needed skepticism.  Randomly look through data sometimes. Notice anything odd or any trends?  Negative fixed assets?  Customer swinging back and forth between large purchases and large returns?  Letting your mind wander by looking at data might also alert you to new opportunities.  What does it cost to sign up a new customer?  How does that compare to the “lifetime” of a customer?  Do we get our money back?   Who is this customer that jumps from $X to $20X in just a few months?  Are there others with the same characteristics?  How do we go after them?

Have you ever been in a meeting and had an acknowledged expert walk in the room, ask one or two questions, and change the entire direction of a project?  The real talent is to ask the right questions, to look beyond the obvious and question the obvious.  So, three cheers for Captain Obvious.  He’s part of the solution. 



   

Comments

Post a Comment

Popular posts from this blog

Are We Running Out of Math?

-
Image
  Here's a question that might seem purely theoretical at first: Is mathematics discovered or invented? While it may sound like the kind of abstract puzzle that leads nowhere useful, this question has fascinating implications for our technological future. As we push the boundaries of artificial intelligence and algorithmic innovation, the nature of mathematics itself could shape what's possible.  Consider the implications of each possibility. If mathematics is discovered—if it exists independently of human minds, waiting to be uncovered like buried treasure—then there's a finite amount of it in the universe. Just as we might eventually exhaust Earth's oil reserves, we could theoretically reach a point where we've uncovered all the mathematical truths that exist. It's a sobering thought: a mathematical peak, beyond which no new foundations can be laid.  But what if mathematics is invented—a product of human creativity and intellectual exploration? This would ...
Read more

Fashion cycles forever. Repackaging opportunities

-
Image
Fashion I'm reading Foundation , by Peter Ackroyd, a book about early English history,.  He's an entertaining writer and throws off some interesting FYI-type comments.  Apparently in medieval England, the thing was to show off clothing with the brightest possible colors.  No matter that the colors clashed.  Bright, loud clothes showed your membership in the well-to-do gentry or aristocracy.  Even different colored shoes were au courant.  I started thinking about fashion in general.  There is no real standard, except that change is mandatory. Many people like quasi-random style variations--it provides an opportunity to broadcast status and success.  So how can this help business people?  Style can be embedded in anything. Customers at the grocery store may walk by the bathroom supplies section and see a toilet bowl brush.  Surely there are no style considerations there.   But yes indeed, a brush with a long, delicately curv...
Read more

On the necessity of a hyper-critical day

-
Image
  Stay positive. We hear this from teachers, friends, partners, bosses, and doctors. I’m guessing even godfather Don Corleone said it once to his lieutenants.   And there’s a reason for this hackneyed advice—99% of the time it works and works well. I hate working with a negative, irritating sour puss and I’m pretty sure you do to.   Now let’s talk about the 1%. Not the wealthy 1%. The 1% of the time you should be critical and harsh in your thinking. Once a year or maybe twice a year, clear your schedule for a hyper critical day where all the stops are pulled out and skeptical/suspicious/unkind thoughts are allowed. Why? Because most of us are basically good people and are uncomfortable with highly critical thoughts. Much of this is subconscious, which is why you need to designate a day for extremely critical, even unpleasant thinking. It takes that to root out mistakes, bad decisions, excessive trust in people, organizations, and businesses.   You have to get up an...
Read more