Hidden Costs 25

Tanmay Vora
Updated on

As a business leader, if you think “costs” are only the ones where you spend real money, think again. Have you ever realized the costs of:

  1. having an inefficient leadership team?
  2. setting wrong examples?
  3. not treating people well?
  4. not aligning middle managers with vision at the top?
  5. long unnecessary meetings and deadlocked debates?
  6. efforts spent in resolving personal conflicts and protecting individual/departmental fortresses?
  7. poor communications and expectations management?
  8. not allowing people to make mistakes?
  9. loosing great ideas because of a “compliance” culture?
  10. acting from a reactive standpoint?
  11. not treating your customers well?
  12. not demonstrating integrity?
  13. ad-hoc-ism and lack of process orientation?
  14. not connecting with your people on one-to-one basis?
  15. inefficiencies structured within your org chart?
  16. treating people like machines (and expecting 100% productivity)?
  17. talking only from a “problem” perspective?
  18. re-hiring/training new hires when your experienced people leave?
  19. not training your workforce?
  20. taking “short-term” view of business?
  21. analysis-and-planning-paralysis?
  22. not challenging the status-quo?
  23. un-prioritized improvements and procrastination?
  24. not listening to customers and their unique context?
  25. not learning from your past mistakes?

These are costs too!

P.S.

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8 Comments

ajay July 23, 2010

Excellent,
Who would have thought about middle manager’s vision. – effective and right management can go a long way.

During my early days in diamonds industry, I was working with Lakhi group. I noticed Dinesh Lakhi’s (The business owner) vision of putting efforts of making employee taking interest in not just doing what they are doing, but also making them understand how diamonds are formed and processed (which was of no use for them to know as far as his business was concerned).

When I asked the boss he said “its hidden profit of company when employee have a wider perspective and are more educated about their work” – Today Lakhi Group is the largest producer of polish diamonds in the world with 35,000 employee.

Thanks for the lovely post. I would like this details in my personal diary. 🙂

Tanmay Author July 23, 2010

@Ajay – Thanks for bringing that very important point. People need to know how their work contributes to the organization. A leader’s job is to share that larger picture so that people can relate their work and get aligned. Having an informed workforce is a hidden profit, as Mr. Lakhi rightly said.

Best,
Tanmay

Anil Kumar July 23, 2010

Awesome!!!
Really these are ‘Must-have’ points for any Leader. Generally, no realized that failing as a leader is a very costly affair. Thanks for this questions and also a valuable questionnaire for everyone. I will start questioning myself 🙂

Thanks for fantastic post.
Have a wonderful weekend!!

Tanmay Author July 23, 2010

@Anil – Thanks Anil, glad that the post led to some introspection. Hidden costs are more dangerous because they occur silently and are difficult to uncover. Having them listed helps identify them.

Glad you liked the post!

Best,
Tanmay

Megha Mehta July 23, 2010

Simply Great!!
Totally employee oriented terms, and its also true if Employees are satisfied in any organization it will grow no doubts. I have no words to write here 🙂 but some of the points are also effective in your personal life also, like say the way u treat waiter in any hotel… I must say I will have good learning from these all points through out my life ..

Thanks a Lot Tanmay!

Megha.

Tanmay Author July 23, 2010

@Megha – While the post was written with business owners in perspective, some of these points also related to personal improvement. Thanks for pointing this out and glad you liked the post!

Best,
Tanmay

working girl July 23, 2010

What about the cost of too many meetings?
.-= working girl´s last blog ..Well- You Can Always Pull a Tinkerbell =-.

Tanmay Author July 24, 2010

@working girl (Laura) – Point No. 5 addresses that. Too many meetings is surely a cost, so is not conducting meetings at all. Right amount of communication requires to be complemented by equal proportion of action. All discussions (meetings or otherwise) that do not result in action become hidden costs.

Thanks so much for commenting Laura, I totally appreciate it!

Best,
Tanmay