Interesting – Deloitte Australia on the cost of too many rules

This is a really interesting paper from Deloitte Australia, about the origins and costs of having too much red tape. Whilst acknowledging that rules are necessary to prevent anarchy, the paper talks about how overlapping rules, multiple conflicting compliance regimes and over caution stifle businesses and cost the Autralian Economy an estimated $249AUS billion a year.

Another interesting finding in the paper was that the private sector is, at least in Australia, no role model for the public sector. The private sector was as likely to be drowning in foolish, contradictory rules as the government. The paper talks about one company that introduced compulsory ergonomic checklist forms for each employee to fill in every time they changed desk or chair, and then imposed universal hot desking, costing 20 minutes per employee every single day. Another company introduced an “approval to seek approval” process with so many hand offs that it took 270 days.

As well as the interesting case studies, the paper produces some steps for reducing rules – 5Cs, in the best tradition of alliterative management techniques. I hope that Deloitte will forgive me quoting verbatim, as their language is a little punchier than I’m used to in policy documents!:

Slash the stupidity – ask staff to list thedumbest things they are required to do as a result of the business’s own rules, then stop doing them.

Businesses should stop asking “What could go wrong?” and focus on “What must go right?”, then challenge their rules in that light. What are their rules really trying to achieve, could they be improved and are they cost-effective? If not, there may be more to dump.

Foster a culture focused on performance rather than compliance, and ensure the organisation’s rule-makers are aligned to its business goals.

Businesses and others should change the way they set new rules and audit old ones to better link rules with strategy and risk appetite.

Make the most of these changes to realise the business’s full potential.

I think these are great headlines when reviewing processes. Of course, in the British Public Sector, some of the rules we follow are legislative and we don’t have a choice. But there are many places I’ve worked where internal rules have grown up around the legislation, often intended to be helpful. I worked in one place, some time ago, where three separate teams had to review each job description to ensure consistency, but didn’t know roles in each others’ teams well enough to spot actual errors. There is a lot of potential for improving productivity even in small ways, by taking small delays and irritants out of processes. Worth bearing in mind!

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