The Dutch East India Company was one of the most profitable companies businesses ever created. Over its 200-year life, it paid dividends that averaged 18% annually. Could any business achieve that today? Maybe today’s business are too error prone.
In the days before 1650, it operated a rudimentary port at the southern tip of Africa. The port’s principal purpose was to resupply the ships with water and food as they made the journey from Amsterdam to the East Indies and back.
A harbormaster there did not have a great deal to do and one of them was a curious sort. He found a better harbor further along the coast. Now Capetown. He carefully prepared a proposal with his idea, the reasons for it and his estimate of the advantages. The next time a westbound ship arrived, he gave the message to the captain for delivery to the masters in Amsterdam.
Several months later, a reply arrived asking for more information. He gathered the information and again sent it off on the next ship. More months pass.
Finally, he received permission to go ahead. More than a year had passed since his first submission.
From first thought to implementation, there was a period of almost two years.
That time was not wasted. It allowed him to perfect the implementation by discovering options, finding needed materials, and labor, and also by refining the positioning of the needed structures.
Jump to today. Email exchange and maybe a visit by jet. Much less than two years. More likely two months. Is that better?
High-speed communication has a cost that is not readily visible.
Most of us need to let information percolate before implementation. We still think at the speed of our ancestors way back in the ‘70’s. Pre fax. Pre email. Pre text. Probably the 1570’s.
Most complex problems involve information carried in our brain at a barely conscious level. We cannot easily see the finished project without discovering the interplay of the parts. We usually do not create a solution, we evolve a solution. We tinker. Like a songwriter or composer. Each new idea leads to another and another again. The final product often bears little resemblance to its beginnings.
When the time is too short, we implement and then fix the problems that arise. Most of the time the cost to fix them is high and the price to implement quickly is never less than the cost to do it more slowly. Edwards Deming, the inventor of statistical quality control, has said, “When you build a defect, you pay several times. Once to build it, once to take it apart and once to build it again.”
Look at medical care in the United States. So-called Obamacare. Not only did it not percolate, the people who voted on it had not seen the legislation before voting. Even assuming the current system was costly and overdue for change, the method of the change chosen will add needless costs. Probably more than the costs to leave it alone and spend a longer time evolving a better system.
How is it that people do not have time to do it right but they do have time to do it over?