Cost
Firstly, the organization has to continually re-learn its tried-and-tested practice. Induction periods of up to 12 months are typical – and expensive, with direct costs variously calculated at 46% of annual pay for a front-line employee to 240% for a middle manager.
Secondly, the body of evidence that would otherwise be available for better decision-making is reduced, a situation that affects the ability of organizations to learn efficiently from their own experiences. By encouraging high levels of job churn, organizations have consciously chosen to operate in isolation to their own hard-won and expensively acquired experience, depending on others’ unrelated experiences. This is even more expensive than having to re-learn, with experiential non-learning estimated by an international management consultant to cost up to 9.7% of gross domestic product in many developed countries.
Thirdly, with the relationship between knowledge and power intimately linked, the corporate body has – quite deliberately and entirely unwittingly – allowed their command to be displaced. No longer are individuals an aggregate part of an established institution. Individuals are the institution for as long as they remain in situ. Then, when the face changes the institution changes, or, more accurately, tries to change, bereft of its continuity and at the mercy of new brooms. Ordered evolution has become a shapeless revolution with such things as corporate culture, ethos, values and tried and tested usage struggling to maintain an even keel. In effect, the motor of the wealth machine has largely disempowered itself. The cost of this is incalculable.
Also known as institutional forgetting, corporate amnesia is among the biggest constraints to decision making excellence and a massive contributor to productivity shortfalls.
Read more about this topic: Corporate Amnesia
Famous quotes containing the word cost:
“The President has paid dear for his White House. It has commonly cost him all his peace, and the best of his manly attributes. To preserve for a short time so conspicuous an appearance before the world, he is content to eat dust before the real masters who stand erect behind the throne.”
—Ralph Waldo Emerson (1803–1882)
“Every new stroke of civilization has cost the lives of countless brave men, who have fallen defeated by the “dragon,” in their efforts to win the apples of the Hesperides, or the fleece of gold. Fallen in their efforts to overcome the old, half sordid savagery of the lower stages of creation, and win the next stage.”
—D.H. (David Herbert)
“The true reformer does not want time, nor money, nor coöperation, nor advice. What is time but the stuff delay is made of? And depend upon it, our virtue will not live on the interest of our money. He expects no income, but outgoes; so soon as we begin to count the cost, the cost begins. And as for advice, the information floating in the atmosphere of society is as evanescent and unserviceable to him as gossamer for clubs of Hercules.”
—Henry David Thoreau (1817–1862)