By Hank Moore, Corporate Strategist
The 100th anniversary of the sinking of the Titanic caused many people to reflect on the glamour that was lost and the opportunities that faded.
I think the Titanic can be used as an analogy to business. The Titanic was a monument to human folly and arrogance. It started with pomp and potential. But it turned into a lot of what-ifs and missed opportunities. So, too, is the case with business, which should learn the lessons from the economic downturn and corporate scandals.
One of my books is entitled “The High Cost of Doing Nothing.” Each year, one-third of the U.S. Gross National Product goes toward cleaning up problems, damages, and otherwise high costs of doing either nothing or doing the wrong things.
On average, it costs six times the investment of preventive strategies to correct business problems (compounded per annum and exponentially increasing each year). In some industries, the figure is as high as 30 times...six is the mean average.
One of the greatest tragedies in history, the sinking of the Titanic, can be attributed to carelessness, insufficient planning, and stubborn pride.
People literally went down with the ship while still quoting the ship’s marketing hype, “Everybody knows this ship cannot sink.” They really believed the spin and rationalized it as a false hope to avert disaster. They were so sure, thought tragedy could not happen to them, believed themselves to be invincible, had false senses of security, and exhibited unnecessarily stoical behavior when confronted with the harsh realities of death.
In 1912, the Titanic, a Trans-Atlantic ship on its maiden voyage, hit an iceberg and sank. Though some people escaped by lifeboats, there were still 1,502 people killed.
If any of following things had occurred, chances are that every life would have been saved. The Titanic would not have sunk if any of these precautions/actions had occurred:
Not only did the people die, but it was the end of an era in travel. The credibility of steamships was shaken. Safety became more important in the luxury travel industry. Other forms of travel could serve customers better, faster, and cheaper. Concern about corporate savings at the expense of quality was raised.
Think of other disasters that brought similar concerns home and forced major changes in planning, policy, safety, implementation, and accountability:
The current success rate for organizational hires is 14 percent. If further research is put into looking at the total person and truly fitting the person to the job, then the success rate soars to 75 percent. That involves testing and more sophisticated hiring practices.
Retaining good employees, involving training, motivation and incentives, is yet another matter. According to research conducted by the Ethics Resource Center:
One out of every 20 employees has substance or alcohol abuse problems...with resulting behaviors that, in turn, adversely affect another 20 people in their lives. Employees with substance abuse problems cost their companies $7,000 per year in downtime or lost days; $9,500 in make-good and work redo; and another $15,000 in opportunity and credibility costs to the organization. Companies with good Employee Assistance Programs reduce these high costs and retain the services of valuable workers.
The old adage says: “An ounce of prevention is worth a pound of cure.” One pound equals 16 ounces. In that scenario, one pound of cure is 16 times more mostly than an ounce of prevention.
Human beings as we are, none of us do everything perfectly on the front end. A learning curve always must exist. Research shows that we learn three times more from failures than from successes. The mark of a quality organization is how it corrects mistakes and prevents them from recurring.
Running a profitable and efficient organization means effectively remediating damage before it accrues. Processes and methodologies for researching, planning, executing, and benchmarking activities will reduce that pile of costly coins from stacking up.
Doing nothing becomes a way of life. It’s amazing how many individuals and companies live with their heads in the sand. Never mind planning for tomorrow...we’ll just deal with problems as they occur. This mindset, of course, invites and tends to multiply trouble.
There are seven costly categories of doing nothing, doing far too little, or doing the wrong things in business:
7 Primary Factors of The High Cost of Doing Nothing:
What Could Have Reduced These High Costs:
A regular contributor to www.trainingmag.com, Hank Moore has advised 5,000-plus client organizations worldwide (including 100 of the Fortune 500, public sector agencies, small businesses, and nonprofit organizations). He guides companies through growth strategies, visioning, strategic planning, executive leadership development, Futurism, and Big Picture issues that profoundly affect the business climate. Moore conducts company evaluations, creates the big ideas, and anchors the enterprise to its next tier. The Business Tree is his trademarked approach to growing, strengthening, and evolving business, while mastering change. His current book is “The Business Tree,” published by Career Press. Moore also speaks at conferences and facilitates corporate retreats on strategy. He has advised two U.S. Presidents and spoken at five Economic Summits. To read his complete biography, visit http://www.hankmoore.com.