We’ve all been there – a decision made, or something said with the “best intentions”. The results – frequently it’s the exact opposite of the original intention. That’s the moment your brain needs to recalibrate – “Wait, that’s not what I meant” or the classic fallback “That’s not what I intended”. It’s a difficult hole to dig ourselves out of, but with forgiving friends and family we usually find a way to keep our relationships intact. Unfortunately, when faced with a similar situation in business, the results can have a long-lasting impact with implications that can echo across the entire organization or even into the marketplace.
Facebook’s public relations challenge, in late 2018, using Cambridge Analytica is a perfect example; procuring subscriber data without explicit permission, serves as a powerful example of when “best intentions” can cast a far and wide net that was never intended or imagined at the time the agreement was made. The Facebook “best intentions” example is fairly straightforward. The news coverage makes it easy for everyone to question the logic behind the decision in retrospect.
The optimal word is “retrospect”. If you were leading this business, would you have sacrificed the revenue opportunity and made a different decision at the time? There are no businesses immune from coming face-to-face with these types of decisions on a regular basis. Thankfully, most come without the media exposure. We’ve crafted some more common “good intention” examples, along with a plan that any business can leverage to avoid the unintentional consequences:
Mixing “Good Intentions” with Business Decision Making
Promoting from Within
Scenario: A company has found itself needing to back-fill a VP of Sales position and they’ve decided to promote their highest performing sales person vs. seeking an external replacement. The employee feels both appreciated and valued by the recognition received as a result of their incredibly hard work. The company employees feel good they work for an organization that provides them a path for promotion and increased responsibility. Both are certainly “good intentions”.
The Unintended Consequences: Although the sales person was a top performer, the skill sets applied to achieve previous individual goals don’t necessarily translate into managerial skill sets; requiring a team and company focus vs. the individualized skills used prior to the promotion. As a result, the new VP of Sale’s managerial direction causes confusion and unintended missteps within the sales team. The novice managerial approach ultimately effects the entire organization. The impact is significant:
Sales have become erratic, and overall monthly revenue drops by a significant amount
Because sales have dropped, previously negotiated supplier volume commitments, begin to miss their intended goals
Because supplier goals are being missed, costs are increasing, and margins are decreasing
Because the highest performing sales person is now in management – there is no longer a reliable sales performer to help make up the unanticipated sales gaps
Key Learning: Companies are often applauded for showing employee appreciation by filling a vacant position with a current employee. It’s a good intention conceptually – until it isn’t.
The Covert Leader
Scenario: There are times when executive management makes a business decision that meets with disapproval by another senior manager. That manager takes it upon themselves to course correct what they perceive as a poor decision. They covertly implement an alternative solution that they deem to be a better option for the company.
The Unintended Consequences: There are now two sets of directives – the primary directive is the original direction made by senior management, the later directive also comes from a senior manager which pulls the company into two distinctly opposite directions. Again, the business is faced with a landslide of significant impacts that take time to materialize:
Internal operational confusion – what direction are we supposed to follow?
Accrued expenses that haven’t been budgeted
Missed revenue goals caused by the operational delays caused by the confusion
Key Learnings: The senior managers that implemented alternative direction most likely had the best of intentions for the company. The confusion caused by what was perceived as being “helpful” actually created the opposite of the intent.
The Sales "Pleaser"
Scenario: Businesses that are dependent on maintaining ample inventory to meet demand, understand there’s always a challenge around which inventory has the greatest demand vs. which inventory has the lowest demand. How much do we need on hand? When do we need to re-order? Where do we store it? How do we distribute? And, What’s the cost to the company for storage and distribution? The decisions made become budget forecasts predicting a fairly reliable cost of goods sold. While it’s critical to adhere to the plan, it’s not uncommon that sales or even someone on the front line will make a special request to order and keep some items on the shelf, “just in case” a customer need should arise. The intent is to keep the customer delighted by the company’s ability to fulfill the request in the least amount of time. A selling tool that’s quickly leveraged when filling new orders.
The Unintended Consequences: One exception often turns into several exceptions and the implications once again have a waterfall effect:
Single unit purchases are usually overlooked in the beginning but over time(typically years) the build up of various single unit items have not been properly accounted for or inventoried – adding unexpected costs, possibly the opportunity to amortize or write down of the expense, and most importantly because of natural employee attrition(those that knew the inventory was available) the “just in case” inventory, intended to be an exception, simply takes valuable space on a shelf.
A single unit may not take much space, but over time, single units become multiple single units which uses space allocated for primary, high-turn, inventory– more incremental costs and logistical chaos.
Single purchases do not benefit from volumetric discounted purchases and unbudgeted costs begin to arise
The single unit purchase still has a cost to the company – left unsold, the cost becomes a loss.