“All plans of government, which suppose great reformation in the manners of mankind, are plainly imaginary.” – David Hume, “Idea of a Perfect Commonwealth”, Political Discourses (1752)
It’s the second week of November, and the familiar year-end pressures are beginning to show. Orders are going out, customers want delivery before the holidays, and there are still a few weeks of trading left to make the numbers. In a business whose financial year ends in December, there’s plenty to be done before everyone starts disappearing for their summer or winter break.
Most owners think of maintaining standards as a constant, something the business either does or doesn’t do. The last few weeks of the year suggest otherwise, because they move some standards and leave others exactly where they were.
The monthly operations review gets moved, just this once, because two of the team are at customer year-end lunches. A quote goes out without its second check because the client wants it by Friday. A good customer’s credit limit is stretched a little, because the order is a big one and the finance manager is on leave. Each exception was decided by sensible people trying to keep things moving, and could be easily explained and defended if necessary. So which standards moved, and why those ones?
Each One Made Sense at the Time
There’s nothing unusual about an established business making allowances for circumstances. In fact, I’d worry about a business whose managers couldn’t exercise some discretion when conditions demanded it. Rules that leave no room for sensible decisions can become an obstacle to serving customers and getting work done, and November provides rather more opportunities to exercise that discretion than most earlier months.
A weekly sales pipeline review that normally takes an hour becomes a fifteen-minute telephone call because everyone is busy. The following week, the sales director asks for the figures by email instead. By the end of November people are dealing directly with their outstanding opportunities, and the formal review has disappeared until January.
In another part of the business, a project is marked as complete, although the final sign-off is still outstanding. Everyone knows the work has been done, the customer is satisfied, and the paperwork can be finished next week. It’s a reasonable accommodation, especially when another customer is waiting for the same people.
Look at either situation separately and there may be little to criticise. The managers involved are doing their best to keep the business moving, and perhaps the review or sign-off really could wait. Yet both arrangements had been considered sufficiently important to maintain throughout the year.
November is unusual in how many of these small accommodations happen within a few weeks. They offer a picture of which parts of the normal way of working people regard as essential, and which they are prepared to set aside when something else seems more pressing.
The Test Nobody Planned
Year-end is probably the closest many businesses come to an annual stress test of their normal operating arrangements. Nobody schedules it as such, but the combination of deadlines, leave, customer demands, budget discussions and tiredness creates conditions that are considerably more stressful than those experienced during much of the year.
What’s striking is how differently operational standards respond, and some survive almost untouched. Consider a distributor whose order processing system won’t release an order when a customer has exceeded an authorised credit limit. It doesn’t matter that the customer has been with the business for twenty years, that the order is particularly profitable, or that the sales director is desperate to get it dispatched before the holidays. Someone with the necessary authority must approve a change before the order can proceed.
That doesn’t make the business inflexible. There may be excellent commercial reasons for extending the limit. It simply means that the decision cannot be bypassed because somebody is in a hurry.
Compare that with a month-end reconciliation which everyone agrees is essential, but which only gets completed on time because the financial controller follows up with the people responsible. When the controller takes a week’s leave in late November, the reconciliation slips. Nothing prevented the work from going ahead without it, and nobody else was particularly concerned until the missing figures became a problem.
Both standards sit in the same procedures manual, and on paper they matter equally. But one is built into the way the work moves, and the other relies on somebody’s supervision. A standard that relies on supervision can be set aside whenever that person’s attention is needed elsewhere, and under strain it will be.
What Went First, and What Kept Happening
A week or two on, it’s worth looking at which standards went first, because the order tells you something. When reviews are the first casualty, the operating rhythm was usually fitted around spare time rather than protected from it. When exceptions get granted by whoever happens to be available, decision authority was probably clearer on paper than in practice. Quality checks that get compressed tend to be the ones that depended on someone insisting, and commitments left waiting to be chased were relying on somebody’s attention all along.
One slip proves very little, though. Emergencies happen, and some departures from a standard are a perfectly sensible call by someone entitled to make it. A manager who agrees a one-off exception within an agreed limit, knowing what it costs and recording why, isn’t weakening anything. A manager who bypasses an approval because the customer is on the phone and the approver is out may well be.
What keeps happening tells you more. It’s the discount offered “for this order only” that the same customer asks for on the next order, and gets. Or the second-partner review in a professional-services firm that’s waived on successive jobs, because waiving it the first time did no visible harm. Once an exception is expected rather than requested, it has stopped being much of an exception.
Refusing an exception under commercial pressure isn’t the same decision as the work turned down when turning it down costs money, but it draws on the same nerve. In both cases the request sounds reasonable, the pressure is real, and saying no can feel like a luxury the business can’t afford in November.
When Tightening Up Makes It Worse
By late November, the slippage has usually become noticeable. A customer complains, a report comes in incomplete, or something everyone thought was fixed needs doing again. The instinct, especially in an experienced leadership team, is to tighten up: add a sign-off, ask for a daily report, insist on seeing quotes before they go out.
Some of that is entirely right. No CEO lets a live problem run on just to prove a point about design, especially where customer commitments or real money are at stake. But the standard now depends on whoever is doing the checking, which is exactly the weakness November exposed. And I’ve noticed how readily temporary controls become permanent features of the way a business works.
An extra approval step, introduced after one costly mistake, can still be operating two years later. By then, it may be the reason a straightforward quotation takes an extra day to reach the customer. People have become accustomed to waiting for the approval, and some may have stopped checking their own work quite as carefully because they know somebody else will check it anyway.
Industries where mistakes can have serious consequences have looked at this closely. The US Agency for Healthcare Research and Quality’s Systems Approach primer distinguishes between slips made by otherwise capable people under fatigue or distraction and mistakes that arise from poor decisions or inadequate knowledge. It notes that adding supervision may influence the individual involved without preventing similar slips by others. Tired, capable people make slips. They always have.
The same holds in business, even when the consequences are far less dramatic. More checking may restore the required standard today while leaving unchanged the circumstances that allowed it to be missed yesterday. And every additional approval has a cost, particularly when it becomes an enduring requirement rather than a temporary response to an unusual problem. A business can gradually become more controlled without becoming more dependable.
There’s also a longer-term commercial consequence. A prospective buyer can examine management reports, policies and operating procedures, but cannot acquire the vigilance of the owner or CEO who has spent years making sure everything works. If maintaining standards depends on that vigilance, there’s more owner dependency in the business than there appears to be.
Leaders will always need to step in sometimes. What matters is how often the same kind of intervention is needed simply to keep normal operations going.
What Was Built Earlier in the Year
It’s worth going back eight months, to when there was time to think about an operating rhythm that keeps things in view without anyone having to remember. Back then, almost any rhythm worked. November is its hardest test, with a crowded calendar, tired people and the most convincing reasons of the year to skip a meeting.
Where standards have held this month, the work was mostly done back then. The review cycle was protected rather than fitted in when someone had a free hour. Who could grant which kind of exception had been agreed, so the account manager knew exactly what discount she could give without asking anyone, and what she couldn’t. The important checks were part of how the work moved rather than an extra step somebody had to remember, and follow-through came from accountability built into the way the work gets done rather than from being chased.
A leadership meeting that still goes ahead in the first week of December, with half the team away, because nobody thinks of cancelling it, tells you a good deal about a business. So does the same meeting postponed until January in a business whose managers are every bit as capable. That isn’t a contrast between a good business and a bad one. Both may have intelligent, conscientious people facing exactly the same year-end pressure. Where one meeting holds and the other lapses, the reason usually has less to do with how hard anyone tried than with what was put in place before the strain began.
Before the Evidence Fades
By January, much of the pressure will have eased. People return from leave, regular meetings restart, outstanding reports are completed, and the familiar routines and standards are once again in operation. A few uncomfortable weeks in November can easily be put down to year-end demands and tiredness, particularly if the business managed to finish the year reasonably well. By February, it may be difficult to remember precisely which standards slipped first, or how many times the same exceptions were granted. Everything looks much as it did before.
Yet those few weeks may have provided one of the clearest pictures of how the business really operates. Whatever became optional first was probably where the structure had been thinnest throughout the year. November simply made it harder to compensate.
So which of my standards went first this year, and how long had it really been held in place by somebody remembering?
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