If you reach for a person when the problem is a process, you’ll end up paying for both
Summary
In this comment piece for CEO Monthly, James argues that organisations often answer a structural problem by hiring. Extra people can do little to fix unclear ownership, duplicated work, poor information flows or weak controls. Instead they compensate for them, until the workarounds become part of the operating model.
A job description built around checking, correcting, reconciling or escalating is a clue that the operating model may need looking at first. Adding oversight is not the same as strengthening control, and more people checking a process can weaken accountability. Because the board approves budgets, it is well placed to ask what created the extra work, how much of it adds value, and whether fixing the process would remove the need to hire.
Three key points
- Extra people can do little to fix unclear ownership, duplicated work or weak controls, and may make them worse.
- A role built around checking, correcting and reconciling is a clue that the operating model may need looking at first.
- Before approving more headcount, a board can ask what created the extra work and whether extra people would still be needed if the process were fixed.
Read the full article
The summary above draws on a longer article. CEO Monthly publishes it in full, including the questions a board can ask before it approves more people.
Insights
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Explore your own question further
In a particular organisation, the detail can change how these points apply. James is happy to hear from anyone weighing them up for their own board, audit function or deal. This page summarises an article published elsewhere, and is not advice on any particular situation.