What do you think has driven it? Software? It becomes a bit of a game to squeeze every cent/optimization while not thinking about the big picture.

It could be because the Lean/Six Sigma types are always pushing for optimization, even in situations where there is a good enough solution, and also because of a poor understanding regarding the expected value of perfect information versus good enough information.

"perfect is the enemy of good enough"

In my experience its basically what mark twang is saying. Its not even about optimization its about being able to put $ savings on your resume.

Financial metrics are one of the "easiest" forms of performance recognition. Its super simple to say "i saved the company xx by enacting this procedure" but what should be focused on (imo) are efficiencies.

For lack of a better example its like a facilities analyst saying ok we expense $0.003 per flush in a toilet so if we halve the water with low flow toilets we'll halve our costs. Only thats not how it works in the real world and the consequences (people flushing 20 times) are not examined.

As for accuracy in accounting, i dunno, people are just really paranoid to miss anything.

Accuracy does not require perfection. Most people don't get this.

This kind of thing can almost always be blamed on business schools. MBA's as a group are pretty worthless people who generally needed to go to college to learn stuff that really should be obvious... and if it isn't maybe business isn't for them?

I'm sure there are good business schools, and I'm quite sure there are smart MBA's... But the average MBA from the average school is a really stupid tool who honestly doesn't understand the meaning much less the implications of the vocabulary words they are constantly throwing about.

Think about how many more times than necessary you have read or heard the various forms of the word 'synergy' for proof.

Lean/Six Sigma is an excellent example of MBA's taking a tool that is useful for the first three uses and trying to use it on a weekly basis for years. This is something of a recurring theme... Basically anything that is trendy with the business school crowd gets done way past diminishing returns at a huge % of mid-large sized firms.

All so that they can hire managers who 'know things' instead of hiring the next person up from within the firm who probably started out as a cashier and knows the whole business backwards and forwards.

This is an extension of our cultures massive overvaluation of the college experience for work. There are like 20 schools in the whole country that can guarantee that the person you hire will at least be very smart. (Is it even that many?) The rest can't even guarantee employers that.

This is actually a larger macro economic stupidity. The devaluation of work experience and the overvaluation of college course work. This charge has been led by the MBA's who have of course spent incredible amounts of time trying to mathematically prove that getting an MBA and hiring MBA's is +EV.

EDIT: Can anyone tell I really hate MBA's? I think they clog up the upper middle management jobs that used to (and should be) filled by the cream of the crop of every companies work force. Those jobs existed as plums to be distributed to people who worked VERY hard for the company for a VERY long time and were demonstrably good at running things. Instead we hire MBA's who then proceed to talk down to everyone about how their 'insert buzzword here' nonsense is going to make the company more profitable. MBA's aren't typically trained to actually do business, but rather to 'optimize' the business so as to maximize how it (whatever the MBA has been hired to run) looks as good as possible on paper. This leads to all sorts of behaviors that can be described as 'capitalism' only in the most short term pejorative sense. The most insulting thing about this is that often these behaviors are massively counter productive in the mid-long term.

I work in a semi logistics related industry. Not uncommon for an operations manager to spend 30 minutes of their time figuring out how to shave off 1 mile off someones route to save 5 cents of gas.

If the route is run daily this is definitely worth it. It's more like 2-3 bucks factoring in driver pay, equipment usage, and fuel. That's 720 bucks a year. Even weekly it's 156 per year. Not a TERRIBLE use of time even weekly.

Good points, unfortunately this is a home service industry and the routes are different every day.

Another -EV practice that I see across many industries is regarding sales training. I've seen so many organizations spend a tremendous amount of money on a top of line sales training program to onboard new salespeople. The only problem is that they only train their salespeople once...and that's it. Sales training needs to continuous, people need to be retrained over and over again, even the managers. I've designed sales processes that I've actually had to re-train myself on, over time you will inevitably pick up small -EV habits that will accumulate.

Sales training is a great example of something -EV companies do. It's pretty much worthless. There's a reason why so many salespeople do really well their first few months... They seem genuine still at the beginning and haven't turned into a plastic copy of their coworkers yet.

Sales training doesn't equal technical training on the product you're selling. Most salespeople could use about 500% more of that. The training on how to actually talk to people is a complete waste of time and probably counter productive though.

EDIT: What I'm trying to say is that sales is one of those things where what works for other people is barely correlated with what will work for you. You have to try things and figure out what works for you as a person. Copying other people's tactics simply hits your authenticity while often encouraging you to make moves you can't pull off (or are nowhere near as brazen as the moves you CAN pull off... this is just as bad).

I know numerous weak intellects, holding diplomas from every single Ivy, so your statement can't be applied strictly to those schools. MIT and Caltech come to mind, and that might be it. Maybe Wharton if you count it as a separate school.

My guess in the dark is that 90%+ of answers here would either be outright foolish (fail for reasons not anticipated) or have close to zero impact if implemented.

There are some macro trends like digitization, which can be applied almost everywhere. Other than that, I remain sceptical of "advice" from outside.

A way more interesting thread would be:

"Little things I thought are dumb, but later realized it's the necessary or even best way to run things"

At least I could give you a big list of learning moments. I'd be more interested reading people who

1) Saw that -EV practise
2) Changed it and made it +EV

In other words, the classical before-after.

Otherwise you have a bunch of people who are nothing else than customers or co-workers who "have a great idea" that everybody DOING things has heard of many times, but knows why it's hard to realize.

The ones with the big good ideas typically leave and start their own thing if the management is too blind.

You're perhaps missing the big picture. I obv don't know this guy.
What I can tell you is that the same level of obsession can save the company a lot of money over the year. A really really smart person can adapt and understand the concept of marginal utility etc, but if that operations manager were that brilliant, he would be running the company.

In other words, it's easy to point out the flaws in somebody below your rank and show how a CEO would do things better. First, the CEO might not even do a better job. Second, that's why he is CEO and not on a lower rank.

Somebody has an MBA!

I can see why outsiders might be a good hire for management in certain situations though. Insiders often have their political network, so there is bloat since they are less likely to fire people. And they might lack perspective from working in one place too long. They might have too much attachment to certain projects that are -ev etc.

So not sure if all those MBAs are useless. See for example Heinz. Outsiders really cleaned up their cost structure.

Standard reason for "why can't company do XXX just themselves". I used to think that as well. But sometimes it's helpful to give people the benefit of the doubt and not assume they are completely stupid and just there to burn money.