|“Investing in new information technology can be painful; can be costly in terms of time and dollars. Maybe it’s possible that you don’t want to do anything or do anything grand right now because you know that there’s something coming down the pipe in terms of a merger or acquisition or new investor or something, so you want to just bide your time.
Of course, there’s a cost to doing nothing, also.
It’s sort of the devil that you know. But you’re not getting all the efficiencies that you might get if you just stand pat. So there are tradeoffs.”
So what are those tradeoffs? In this video interview, Steve Weissman explains that whether you are a market leader of one of the “chaser’s”, there are hidden costs to doing nothing at all. Find out what they are…
The Hidden Costs of Doing Nothing
To begin, what are the biggest issues a company faces when they choose not to invest in a new technology, not to consider process improvement initiatives, etc?
Do you often find that organizations tend to wait until there’s some big problem or big reason before they try to find a solution?
So you mentioned risk a couple times in there. So I’m sure exposure to risk is something that is an obvious cost when you do nothing at all. What are some of the kind of risks that organizations face that could be avoided or potentially helped with a solution?
One of the things that we keep seeing in this information management industry is that more and more companies are turning to new technologies, new solutions, to better manage their operations. So if you’re not doing that for whatever reason, because you maybe don’t see that as necessary at the time, or you keep putting it off. Eventually, everyone else is doing it. That’s got to start affecting you, if all of your competitors are investing in this and you’re not.
If you are not moving ahead, you are falling behind…
I was going to ask, but I think you just answered it for me. I was going to ask what would be the very first step that someone could take. Would you say that getting those policies down would be the first step that someone could take?
Steve Weissman: Sure. Thanks Sam for having me on again. And “Hi gang!”
The biggest issues associated with doing nothing, which is certainly the easiest and comfortable thing, is that you end up unnecessarily prolonging whatever operational pain you’re experiencing. This is true even when circumstances aren’t dire.
A lot of times people think, “Well, everything is working OK. We know what we’re doing. There’s no great hang ups. Yeah, we could probably do things better. But, you know…(dot, dot dot)”
The issue is, there is a drain on efficiency and there is a drain on financial performance.
Sure, it still works.
You can clean up your kids by throwing them in there.
And it’s all fine because they’re usually done before all the water drains out.
But the simple fact is the water is draining out. You are not making the most use of it as you can.
So there’s a cost there that is literally in that case leaking out of your operation if you will.
So where a lot of people think, “Doing nothing is OK. We’re kind of preserving what we have.”
The truth is there are costs there. I know we’re going to talk about a few more of them in depth, but it’s a fallacy to think.
Like exercising. If you’re not moving ahead, you are falling behind. There’s no such thing as staying where you are.
Samantha: Do you often find that organizations tend to wait until there’s some big problem or big reason before they try to find a solution?
Steve: Oh, absolutely. There’s nothing quite like a crises to spark action. What’s interesting in the business world is, sometimes the crises is somebody else’s.
That if you’re even a smaller community bank, you read about something that’s happened with a large one, like Bank Of America or somebody, which I’m just using as an example. I’m not suggesting there’s some problem the world doesn’t know about. But a lot of times, organizations look to their peers to see what’s happening. And they think, “Oh my goodness. That could happen to me.”
There’s a fair amount of denial where they would think, “Oh, that would never happen to me.” But it can, and it does. There are lots of risks that often don’t get thrown in your face until something bad happens. But they do exist.
So in some ways, some of this information management best practice that we’re kind of talking around, it’s an insurance policy. It’s good business. So unlike an insurance policy, you’re not left feeling like you’re just writing checks with no return.
But you’re also guarding against really bad things happening in terms of your information, or how compliant you are with regulations, or keeping your legal counsel happy because perhaps there’s a lawsuit bubbling up. And you want to be sure that you’re protected.
Then again, under that same heading of “if you’re not moving forward you’re falling behind,” there are missed opportunities that you may not even notice you’re missing because you don’t have the proper structures in place, and the proper policies in place.
So I put all of this under the heading of “risk avoidance” or “risk mitigation.” It makes great sense to sit down and talk about all these things before you have that problem. Because once you have the problem, if it’s not too late, it certainly gets too expensive.
Samantha: So you mentioned risk a couple times in there. So I’m sure exposure to risk is something that is an obvious cost when you do nothing at all. What are some of the kind of risks that organizations face that could be avoided or potentially helped with a solution?
Steve: There are a few, and I kind of just ticked them off but just to drill down a little bit.
When we talk about “information related risks,” think about the headlines that you see about a credit card company or somebody having to notify all their customers because there was a breach and your private information may have gotten out. W
hat I love about those things is they don’t say that “it has.” They say “it may have.” And they never talk about what to do about it. So that’s a whole different conversation.
But if you are investing in the right practices, and thus, then the information technology necessary to support those practices, an order that’s very important by the way: don’t start with technology.
But instituting the right kind of practices, you’re going to close some of those loopholes and those potential risks.
Similarly, looking at that as it relates to regulatory compliance, or industry standard practices for the business that you’re in, to make sure that there’s no opportunity for a legislator to come after you because there was some new law passed last year, and maybe you didn’t even know about it.
Now suddenly you’re in violation. Or legally somebody is going to sue you for something, and you realize you have no efficient way to respond to their discovery motion where they give you a long list of information that they want you to produce.
A lot of the discovery initiatives are undertaken simply because of what it costs to do discovery. It’s all electronified. It’s so much more efficient. It pays for the system.
So all you really need is one legal problem and it’s paid for itself.
Then there’s the financial aspect, which I touched upon in terms of missed opportunities. Better information management means you can do a better job of mining your customer data, let’s say, looking for patterns.
Being able offer those special deals to do things to better support the customer so that you reinforce the loyalty that you like to think is there.
But you got to give them a reason to stay.
Same thing works with business partners. If you don’t have the information systems in place, it’s really hard to get that kind of intelligence out of the data that you have. Often, it only takes one or two opportunities that you would have missed to thereby justify putting in the right practices and the supporting technology. So it cuts all different ways.
Samantha: One of the things that we keep seeing in this information management industry is that more and more companies are turning to new technologies, new solutions, to better manage their operations. So if you’re not doing that for whatever reason, because you maybe don’t see that as necessary at the time, or you keep putting it off. Eventually, everyone else is doing it. That’s got to start affecting you, if all of your competitors are investing in this and you’re not.
Steve: Oh, absolutely. The competitive standing aspect of it is really important. It works whether you’re a market leader or not. And that’s often a point of discussion when I’m working with clients.
Because they feel, “Well we’re the market leader. We don’t have to do anything. Everybody has to catch up with us.”
Well, to my thinking, part of what constitutes catching up has to do with investment in information technology so that they can become more responsive to their customers and their partners, as well as their shareholders and all the other constituencies.
So if you’re a market leader and you’re not doing anything, chances are pretty good that your rivals are.
The flip side is, if you’re the chaser, let’s say you’re second, or third, or 106th in your market, it can really be a competitive advantage to get on board with some of these things presuming that you can find budget for it of course because there’s a real possibility that the folks ahead of you in line aren’t doing it.
So from that standpoint, you will be better equipped to sever your customers better, to respond to their inquiries faster or allow them to do it themselves.
Maybe you want to leap ahead from a multimedia standpoint and get more creative with your self service options, including voice. Very often on websites the chat button pops up. Would you like to chat with a representative online? All of those things are all about making the experience richer for the customer. And the word gets out eventually.
So if you’re a banker, an insurance agent, or whatever you do, if you’re able to respond better and more quickly than your competitor can, the word will get out, and inevitably, you will attract some of the people out from under your competition.
It’s not an overnight thing. That’s another one of the frustrations here. This is not one of those things where you put the coin in up here and the candy drops out down there. It’s a commitment to doing things better and smarter.
You don’t have to break the bank to get a lot of benefit. You have to be sure that you’re presenting your modernity, I guess, your creativity, your embracing of innovation, to the market or they will simply assume you’re a curmudgeon.
It will work in the opposite direction where you may experience your customers defecting or your partners defecting to go where the grass is greener.
I try to distill it in terms of fundamental business relationship. The better you can serve the people that you serve, the more likely it is they’re going to like you and want to give you more money, or greater loyalty if we’re talking about employees internally because a lot of this stuff can lead to reduced turnover.
That saves you money, too. There is a business benefit to cutting your employee departure rate because you don’t have to train as many new people as often.
Again, this cuts up, down and sideways. Doing nothing addresses none of that. You can be sure that somewhere in the competitive mixture other companies are, and you fall behind by virtue of standing still.
Samantha: That makes perfect sense. It just reminds me of something personal I had gone through where I purchased furniture at a company and I purchased the extra insurance with it. But in order to make a claim, which I had to do, you have to get someone on the phone. They have to email you the forms to your personal email account. You have to print them out, fill them out, scan them, fax them, call them again. It was such a big headache. Being in this industry, I found myself thinking if I could find a furniture company to purchase through that used a system such as this to make my claims easier, I would chose that furniture company alone, just for that reason, because it is such a hassle to get things completed as a customer. It shouldn’t have to be that way. I can relate to that.
Steve: Well, the thing is, the cynic in me says that furniture company did that on purpose because they want to make it hard to file claims. Then they don’t have to pay out anything.
I’d like to think that’s not what’s at work. It could be. But this leads the way to so many other fundamental business conversations, like why focus on making the claims process easier if you get a lot of claims? The real issue is you’re getting a lot of claims. Something fundamentally is going wrong that you keep having these issues.
The whole approach here at Holly Group, it’s this holistic perspective. It’s not really a technology problem at all. It’s almost always a business problem that the solution can be facilitated by the proper use of the proper technology.
The example you just described is the ultimate of it, because let’s fix the business problem. It’s not just a matter of making it easier to file a claim, although maybe that’s where you start.
There’s more going on here than just that.
Samantha: What’s the moral of the story here for all of our listeners?
Steve: The moral of the story is: do something.. do anything!
Don’t just sit there, because your market is not sitting there.
Everything is fluid. If you can’t afford to invest in technology, then at least invest time in understanding the processes and making sure you’re working as well, as efficiently as you can. Invest in training to make sure that your people are actually using the technology you have the way they’re supposed to and optimally.
That’s another thing that often gets overlooked. People get hired, stuck in front of a computer screen and then never talked to again. They just do what they do. And it works. It’s OK, because it works. But it may not be working well, and that brings us back to where we started, this notion of prolonging the existing pain.
In all of this, moral number two is you look for the low hanging fruit.
Oftentimes, I have conversations with clients who want to do something, like I said, do anything. But they’re thinking way up here, which is good.
But they say, “Well, I can’t afford to do all of that.” It’s like, OK.
The metaphor that everybody loves and hates, the notion of low hanging fruit. What’s the stuff that you can get to right away that’s within reach, that’s manageable in size, that’s likely to be successful and can pave the way for some of these other things?
You don’t have to blow it up and start over again. Simply starting where the pain is, even if it’s just a nagging ache, can get you quick results that really demonstrate why this is so important.
Even if you never get to the rest of this stuff, at least you’re on your way.
Which then brings me to the third moral of the story, which is don’t be afraid to try anything. Doing something is almost always better than doing nothing.
Even if “it doesn’t work,” a really good example in the realm of compliance, in the realm of e discovery, one of the worst things that you can do is nothing when it comes to things like document retention policies or guidelines for the use of social media, and stuff like that.
Having a policy and making it clear that you intend to enforce that policy will demonstrate to a judge or to an auditor that you’re aware and that you’re taking steps to address it. If there’s nothing in place, you’re kind of in trouble because you can’t then demonstrate, oh, it was the employee’s fault and not the company’s because they didn’t follow the guidelines. You had no guidelines.
You’ve got to try stuff. Even if you don’t get to the technology, you’ve got to sit down and at least deal with the policy review. Do you have policies to govern the way your information is being managed and shared and used?
If you don’t, get some. If you don’t do anything else, do that, because that’s among the first steps anyway. At least doing that, not only does it protect you from certain legal and compliance risks, it also begins to pave the way for all the other stuff that we’re talking about that you may want to do.
Again, do anything. It’s better than doing nothing.
Samantha: I was going to ask, but I think you just answered it for me. I was going to ask what would be the very first step that someone could take. Would you say that getting those policies down would be the first step that someone could take?
Steve: Yeah. I suppose the word that comes to my mind first is inventory. You have to take score about where you are, in terms of what information is the most key and critical and who touches it and under what circumstances.
Again, in its broadest strokes, I tell clients we’ve got to take a piece of paper and follow it around from the moment it enters your organization to the moment it sits down and rests somewhere. It may be a database. It may be an archive. It may be the trash can.
The point is to understand what is it and how is it supposed to be used so that you can then start understanding, is this going the way we really want it to or is this simply happening because it’s the way it’s always happened?
I use the word inventory to begin. It’s an inventory of policy as well, because the paper, the documents they don’t have to be paper, of course that’s just one side of the coin. It’s the governance that’s the other side. You have to do both.
We spend a lot of time working with clients on exactly how to do that and who’s on the committee and all that kind of nonsense. I’m not suggesting it’s easy, but it’s better than having your head in the sand. Sooner or later, it’s going to come back to bite you.
We talk about the cost of doing nothing. It doesn’t have to be a lot of cost to do something. It promises, in many cases, to get really expensive really fast if you do nothing, depending on how circumstances unfold.