Designing Systems Based on Outliers: Why You’re Doing it Wrong.

There seems to be an unsettling trend among business owners, over process creation. Too often, we create company processes or company-wide rules based on the exception to the rule. The one person who operates outside of the lines. We get distracted by the kid in class who talks too loudly and we righteously aim to entirely to solve or control this problem.

We get provoked because of the outlier. The one individual who either does not follow company processes or is unaware of the rules that do indeed apply to them.

But spending time creating organizational processes based on the actions of the outlier is a waste of your time and energy.

Yes, I know you want to solve each problem and have the complete grasp of organizational processes. But spending your resources because of one is draining your company.

In a conversation with a fellow business owner, there was a complaint highlighting an issue with the company dress code. But in reality, the policy itself was a non-issue; there was a problem with one individual and how they failed to adhere to the dress code. Instead of handling that person–this particular outlier–a series of new rules were put into effect which impacted everyone in the organization.

Another example is the story of the ice cream store owner who offered a promotion for a free ice cream cone. While looking at the line, the owner noticed someone who had already received an ice cream cone waiting in line a second time. We can quickly look at that one person who is “scamming” or “taking advantage” of the system, but the larger reality is there is a neighborhood/host of people not taking advantage of the system and using the promotion regardless of the outlier is getting the store the intended result of exposure.

Every interaction with customers matters. Every touch, every 10% off email. If you turn a coupon into a legal document, you have already lost. Well-invested marketing dollars designed to incentive loyal customer behavior should not require each client to retain counsel before shopping at your store. By creating company processes based on the irritating second-ice-cream-go-er, you have successfully hindered the ability of your business to offer the full positive value to your community.

“Well-invested marketing dollars designed to incentive loyal customer behavior should not require each client to retain counsel before shopping at your store.”

While it is tempting to try to create an airtight rule or approach to any given issue or concern, it is far more efficient to focus company resources and your executive brain power on the intended client base and product goal.

There will always be an outlier; there will always be one distraction. Don’t get bogged down with frivolous company policies that take away from your intended purpose.

To do this, create the practice of spotlighting business rules that were catalyzed by an outlier. Releasing these systems delivers freedom not only for your customers but your company’s resources.

By removing disclaimers, the majority of limitations, exclusions, and the list of conditions that confine and potentially frustrate your customer, you allow them to engage with the given incentives entirely and as a result, having a more positive experience with your product.

We can see this with huge stores like Bed, Bath and Beyond; they accept expired coupons. They operate full-well knowing that they could remove the expiration date, but doing so would negate any sense of urgency they’re breeding in their targeted audience. Removing this feeling of urgency could reduce redemption rate of the coupons, therefore lessening potential profits.

Instead of creating unnecessary rules, have the hard conversation with the outlier. More than likely, they don’t have the information to understand what is appropriate or expected. Addressing the outlier saves current and future employees from compounded complexity which is likely not needed.

The only dress code we’ve ever had has been:
-closed-toed shoes will be while working in the warehouse
-nothing with hate speech is allowed
-if you have a question about wearing something, you probably shouldn’t wear it
-use your best judgment

By putting faith in our employee’s judgment, we run the risk one could take advantage of our policy. But the possible actions of one person’s failure to adhere to this dress code will not overshadow the vast majority of those who follow it. The outcome and execution of simple processes are preferable over that of which employees are confined to a stressful dose of compounded, multi-level policies of increased insanity.

Before making a rule, process, or anything regarding your business processes, ask the following:
1. what or who is the reason for this process?
2. does this process need to be implemented?
3. how many people does this impact?
4. how will this be viewed by others who are not directly impacted?

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