An old story tells about a young bride who was cooking her first ham. She cut off the end of the ham before putting it into the pan to roast. When her husband asked why, she said that’s what her mother had always done.
When they called the mother, she said that’s what the grandmother had always done. When they called the grandmother, she said she had always cut off the end of the ham because she didn’t have a big enough pan.
So it happens in many family businesses. Processes and practices develop over time. Some prove to be sound business ideas that the company should continue doing.
Others, however, become habits that need to be changed. If you hear the phrase “That’s the way we’ve always done it,” you need to evaluate the practice to see whether it should be changed or continued.
Take this example: A bookkeeper has worked for a company for 30 years. The first thing she does when she receives a bank statement is put the cancelled checks in numerical order, which takes nearly an hour.
When asked why she does that, she responded that she has always done it because that’s what the owner told her to do when she was first hired. Now, however, the bank statement lists every cancelled check in order.
There is no need to organize the actual checks unless the bookkeeper encounters a problem that requires her to look at an actual check. The owner rarely looks at actual cancelled checks either, so the hour the bookkeeper spends organizing them is wasted.
Other issues can be more complex. One company had a track record of being a “preferred customer” from one of its major suppliers. The company took great pride in this continuing designation.
But upon closer scrutiny, the designation was based solely on how much the company had purchased from the supplier. The supplier encouraged purchases by waving the “preferred customer” flag before the client.
Facts revealed that the company had excessive inventory, much of which had become outdated. Yet, it continued to purchase at higher volumes than its sales would support to keep the coveted designation. After all, that’s the way they’d always done it.
In all companies, young and old, processes and practices need to be continually evaluated. Do they make sense? Why do we do this or that? Is there a better way?
Here are ways to identify unnecessary steps:
Swap jobs. Let someone who doesn’t usually perform the process do it. A different person is more likely to question why certain steps are taken.
Get the department as a group to flow chart the process to discover what actually happens – not what the supervisor thinks happens. The group may notice redundancies or unnecessary steps.
Ask your CPA or business adviser to walk through processes with you. They will likely be able to spot unusual practices and ask questions to help you evaluate their true usefulness.
Doing something because “That’s the way we’ve always done it” doesn’t always make sense. Be thoughtful about your practices. Your business will benefit.