Thursday, December 6, 2012

How to Waste Money Without Even Trying

Do you remember that episode of "I Love Lucy" where Lucy got a job in the factory and got in trouble because she worked faster than everybody else?
This is exactly how money gets wasted in government or any organization. It's obvious from the outside that an activity has no point, but on the inside there are all these justifications.
Over the years I've heard how these justifications are communicated, directly and indirectly. Given the impending "fiscal cliff" I wonder how much money we could save if we started to examine the ways that we perpetuate wasting it.
Here are 5 mechanisms of waste that we can start with:
  • Narrowly operational focus: Project management is defined as delivering any project on time, on budget and within specification as opposed to stopping an ill-conceived project before it launches. The employee is supposed to follow along transactionally, not critically because the bigger decisions are "above my pay grade" and "outside my scope."
  • Personality-based decision-making: Projects are initiated, promoted and launched based on trusting an individual's thought process or deferring to their institutional stature, rather than objectively evaluating whether the project makes fiscal sense or not.
  • Spend it or lose it: This is the concept of using up all your money so that you get the same amount of money next year. It relates to -
  • Empire-building: Which is when you defend your turf against an aggressor by enlarging the scope of your responsibility.
Finally, my favorite:
  • Nonsense arguments to justify a predetermined outcome: My mother is a very simple person and that's why I run things past her often. If you can't explain the logic behind an idea to my mother in three seconds, then she'll tell you to your face - it's b.s.
This is not at all about blaming government. Rather it's about looking at common dysfunctional mechanisms in all large organizations to see how we might make things better here. Because what's so insidious about these kinds of issues is how taken for granted they are.
In other words, it's not that anyone is trying to waste money, necessarily. Rather, the power politics of the organization, its culture and structure dictate that people behave this way or else risk being marginalized or worse.