Attention to details is a waste of time.
Hang on! before you decide to kill me, attention to details is surely an important trait to have and particularly important to develop anything and everything. However, one needs to pick the right product, the right time, and the right task to apply it to. It is also critical to understand who needs to pay attention to details and where it is needed.
Blindly applying attention to detail is not only a waste of time but also a waste of money and energy.
Blindly applying attention to detail is not only a waste of time but also a waste of money and energy. Since I have been working in the finance and administration departments of different organizations for the last three decades, I have found a few tasks and a few areas where I believe attention to detail is a waste of time.
If you are the product builder, it is absolutely necessary to pay attention to every detail in every aspect in every department in every feature of the product. So please don’t listen to me, I am just addressing the department of finance and administration and top management of your company here.
It surely becomes counterproductive if a CEO/CFO starts paying attention to details on the things like; “allocation of company overheads to different departments or business units”. Here are my five areas where I think attention to detail is the waste of time:
- Requiring your experienced employees to do research on everything:
I believe the primary benefit of experienced employees in any company is that they are hands-on in their professions. They have done or reviewed most of the tasks the business is expecting them to deliver. So, they can do them before the young executives do because they already know how to do them. They have been practicing it for years.
If you are expecting them to do it after detailed research and reading the complete process and asking them to tick all the boxes before delivering or signing anything, you better hire management trainees who will do a better job than the experienced and seasoned professionals.
You are absolutely wasting their experience. If an experienced person does everything after doing the research, checking the process, and checking every minute detail which is expected from a young executive, they are wasting their time and consequently the company’s time.
- Allocation of overhead to different Business Units:
This is something I referred to in my introductory paragraph as well. I came across it many times during my professional career and kept fighting to avoid spending time on allocation of overhead to different business units or to different departments. People don’t understand that this is not going to make any difference to the profitability of any company. It will be far better if you ask your finance and administration team to put the same effort into reducing the overall overhead. I mean, if you do not understand your business’ profitability at the level of gross margins, please close that business down.
Everyone must understand that the overhead is a fixed cost to a business which will automatically come down as a percentage of revenue and direct cost as the business grows. If you start fighting at the early stages of your business on the allocation of overhead, it is not going to help. Focus on developing the business and delivering it successfully, the overhead will come down as a percentage of revenue, I guarantee you.
The more rapidly you grow your topline, more rapidly it will come down as a percentage of your revenue.
- Spending too much time on estimating and forecasting:
This is another thing that I enjoyed working on in the early years of my professional career, but I started getting frustrated with doing these activities frequently with a lot of focus on estimating and budgeting by going into every detail. I have never seen a business delivering right in accordance with budgets or forecasts. It usually falls apart in a big way.
I remember one instance, we were planning a year from the current year's revenue of 700 million, and the number for next year, in the first cut of estimation came out to nearly 1.5 billion, more than twice the amount. We re-checked and that made perfect sense, but then came our strategy meeting. We kept fighting on the number for a long time and we locked it at around 1.4 billion. I remember, at the conclusion of the strategy session, most of our colleagues were not convinced that we could achieve this much of revenue.
We achieved 1.9 billion that year. Had we settled with 1.5 billion and saved these hours of discussion of top management, to put the same on planning for the new business development and successful delivery of services, we may have ended up making more than 2.0 billion.
My belief in this thing got even stronger when recently I started working with another organization which has hardly done anything on budgeting and forecasting. I am leading this exercise for the first time in the history of this new organization.
- Focusing too much on financial analysis:
Sometimes, we forget that financial reports are like result cards, how can a result card guide you to improve your grade in mathematics, I mean, this can only tell you that you have a grade “C” in math. You know where the problem is, but you don’t really know the solution to it. So, we should only spend time on financial reports to understand our grades on different business units and focus on developing the business and successfully delivering the business to improve the grades (results).
The result card is never going to tell you which book you need to read to improve the result next time, so seek guidance from somewhere else, find the right teacher, and the right book or do the research to find the right solution to develop and deliver the real business. Financial analysis can only tell you about the grades by subject, so stop exploring these beyond that and wasting your precious time.
How much time do you think Steve Jobs used to spend on financial analysis of his company?
- Intruding too much in the role of finance, HR and admin:
I came across some of the business leaders who used to go so deep inside the accounting and administration exercise where even I, being head of department, never went, and left it to the officers at the lowest rank to take care of.
This is a waste of time. The business leader should view the business units and ask the right questions from the business unit heads. The business unit head must understand the big picture; the result of their business unit and understand all parts of it.
In my experience, many support setups start diverting the production of data and information into the way the leaders of the company influence them and forget the basic standards of producing that information. The leaders must keep their influence only on producing the management reporting, to understand the business results correctly and never to influence the flow of information provided as per generally accepted principles.
The support setup’s role is to provide all basis to make informed decisions.
It is always wise to guide and train the staff at all levels and let them do their work on their own. That is where the leaders should invest their time and ask the team to pay attention to details rather than putting their own precious time into attention to details. It is also called micromanagement (to some extent).
Having written all the above, it is very important for the finance and administration team from bottom to senior level executives, to pay attention to details where it matters, so the information shared with the management is always correct they don’t need to pay attention where they don’t have to.
Please feel free to ask any questions or offer any feedback about this piece.
Qamar Abbas Sipra
Founder, FINACC Consultants