Total Cost of Inaction

One of my favorite quotations, on the subject of leadership, is attributed to Petronius Arbiter, Roman Navy, 210 B.C.:

“We trained hard… but it seemed that every time we were beginning to form up into teams, we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralization.”

If he were to join today’s U.S. Marine Corps, Petronius Arbiter would not have that experience. The Corps holds firm to “the 70 percent solution.” Its guiding principle: “If you have 70 percent of the information, have done 70 percent of the analysis, and feel 70 percent confident, then move.” The logic is simple: a less-than-ideal action, swiftly executed, stands a chance of success, whereas no action stands no chance. (excerpt from Chapter 10 of the book Beat the Odds: Avoid Corporate Death, 2007)

A recent trip with the family to our favorite Chinese restaurant yielded this timely “fortune cookie message” on the same theme – Many a False Step is Made by Standing Still.

Modern organizations adopt numerous strategies, concepts, processes and tactics that are supposed to enhance their current performance and increase the chances of future success. Those of us in the supply management and procurement world are familiar with a variety of useful concepts, including TCO – Total Cost of Ownership.

Perhaps we can take the lead within our own organizations to introduce one additional concept: let’s call it the Total Cost of Inaction (TCI). TCI would be the sum of the potential adverse impacts from failing to act, or from deferring the decision to act. I am certain that you can identify situations from your own experience where the company’s failure to act on your recommendation(s) ultimately cost the company a lot of money.

Total Cost of Inaction – TCI. If explicitly discussed and taken into account, TCI might just provide the needed nudge/impetus for faster decision-making and support for the follow-through actions.

For related articles click here.

SC
MR