In my last article, I explored the drawbacks to our business of overcompliance. Too many rules and policies inhibits innovation, motivation, engagement and productivity.
In fact, Australia’s productivity is operating in low gear as a direct result of over compliance. Not only are we dramatically increasing the cost of governing our economy, the largest source of growth in rules and regulations is in the private sector.
In a recent report by Deloitte the following real cost of our rules and regulations were defined;
- $94 billion spent on administering and complying with public sector rules.
- $155 billion spent on administering and complying with self-imposed rules and regulations.
- Unquantifiable losses from forgone incentives, enterprise and innovation.
- At least eight weeks of work just to cover the cost of administering and complying with rules.
How can businesses escape this cycle of overcompliance and underproductivity?
We are living in a world where working hours can be taken up with so much more than pure productive use of time.
Technology has already led to a drain on our productive hours. McKinsey and the Radicati Group have estimated the average worker now spends at least 25% of their work week responding to emails. There is a plethora of new technologies to compound this even more – instant messenger, teleconferences, meetings, the list goes on.
The time people have to actually do their work has become less and less. It is critical that employees don’t waste even more of their precious time following unnecessary rules and procedures. By cutting some of them back, businesses can also claw back more productivity time by reducing the number of emails, meetings and other interactions that directly relate to compliance activities.
Leaders need to delve deep into their own policies and procedures and look at the impact they are having within their organisation. What are they missing by holding the belief that team members need procedure and would be less competent without it? They need to be honest with themselves – do the policies, procedure checklists and other red tape, do more harm than good?
Organisations need to unlock the profit potential they have tied due to their own overcompliance. Here are some ideas that businesses could embrace to unleash their people and productivity from the restrictions of red tape;
- Ask employees at all levels for their feedback on the most limiting rules within the business.
What frustrates them? What demotivates them? What procedures do they have to follow that really stop their work flow? What are the roadblocks to getting their work done? Once the worst offending red tape, rules and processes are unearthed, management should really assess what can be done to minimise or eliminate them altogether. - Turn the focus from “What could go wrong?” to “What must go right?”
Leaders need to go through all their rules and procedures under the light of this new perspective. One by one, what are the rules already in place really trying to achieve? Are they cost effective? Is it possible to improve them? Can they be deemed as ineffective and be discarded altogether? It’s surprising how many rules can be removed and how productivity can be unleashed if businesses had the insight and confidence to make this kind of change. People could actually do their work rather than spend large amount of their time following protocols and compliance practices. - For all future rules and procedures, ensure that if they are introduced, they do not have an negative impact on productivity.
If businesses focus more on performance and less on compliance they can ensure rules that are implemented are properly aligned to the greater goals of the business. Each rule needs to be accurately weighed to ensure the risk is not overcompensated at the cost of productivity. At the moment we do tend to overcompensate and cover the worst-case scenario, but the cost of this and the damage done is far too high. Rule-makers need to move forward in a way that does not always err on the side of over caution. What can be implemented within an organisation to hold rule-makers accountable in this way?
Businesses need to take an honest look at their own red tape and reprioritise productivity over compliance. How is your business achieving this? I’d love to know. Could your leadership team benefit from one of my tailored workshops? Please get in touch today. I’d love to help!