Faulty Thumb Rules

September 19, 2016

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May 2016

When a Shortcut isn’t a Shortcut

Last week, I was driving to the office, taking the same route I have taken everyday for years. I have always been proud of this route; considered it my “secret.” It dodges the main street, has little traffic, has more scenery, and gets me to the office ten minutes quicker than the thoroughfare. Or so I thought.

On this particular drive, I was with a friend ­­ a lifelong resident of the area. As I turned onto my “secret shortcut” he asked, “why are you going this way?” I smiled and bragged, thinking of all the hours I’ve saved myself over the years: “this is my shortcut. I take it everyday.”

My friend nodded and replied: “you do realize they put in three more lanes on the thoroughfare last year. It’ll get you to your office about twenty minutes quicker.”

The next day, I tried his route, and he was right. My shortcut was not a shortcut. In fact, it was the opposite. This reminded me of something I see in businesses all the time, what I consider to be “faulty thumb rules.” These are rules that we take for granted as being true, as shortcuts, that when left unaudited over months and years, actually turn out to be false. I caught up with a former student of mine, Greg W., a very successful entrepreneur and asked him if he’d ever suffered due to a faulty thumb rule. He frowned and nodded: “for years and years, I hate to admit.”

Greg runs an international shipping company. He moves merchandise all around the world, quickly and efficiently. Logistics and attention to small details are something that Greg prides himself on. For years, he had been working with one large international courier. And for years, Greg thought he was getting the best rate on the market for the volume he was shipping. “At the time that I started the business,” Greg says, “this was the best rate, hands down. It couldn’t be beat.”

So this rate became a thumb rule. But over the years, competition in the global courier sphere heated up. The rates of the other companies dropped, some to points well below the rate Greg was paying. However, Greg, convinced he could continue to rely on a thumb rule, continued to stick with his original shipping company.

It wasn’t until Greg decided to audit his business’s expenses that he realized he could have been saving money. “I felt terrible,” Greg laments. “It was almost as if I was throwing money away.” As a result of the audit, Greg negotiated a much lower rate with a competitor’s shipping company. “And you can trust that I will be looking at new rates every month now.”

Though it took Greg some time, he was able to correct his mistake and grow his business’s profits. His solution was correct: taking a look at every facet of the business he had taken for granted to ensure he wasn’t relying on faulty thumb rules or shortcuts that were actually not shortcuts. Greg learned his lesson

And I learned mine as well. After I post this blog, I will be pulling up Google Maps and taking a long look at all of my “shortcuts” around the city to make sure I’m not spending more time in my car than necessary.

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