Most corporate improvement initiatives waste billions because they lack systems to sustain results. The expert guest calls this a "massive leaky bucket problem," where initial gains are quickly lost, rendering the investment pointless.
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Large enterprises navigate a critical paradox with new technology like AI. Moving too slowly cedes the market and leads to irrelevance. However, moving too quickly without clear direction or a focus on feasibility results in wasting millions of dollars on failed initiatives.
Leaders in large companies often lack visibility into the day-to-day workflows that drive results. They see inputs like salaries and outputs like KPIs, but the actual process of how work gets done—the institutional know-how—is a black box that walks out the door every day.
When planning initiatives, account for a hidden tax. Any new change will cause a temporary 20% dip in revenue and productivity. Meanwhile, any process left alone improves by 5-10% as people get more efficient. Your initiative must therefore generate over a 30% uplift just to break even.
Implementing changes introduces disruption and retraining, causing a predictable short-term performance decline of around 20%. This 'cost of change' means leaders should reject incremental improvements and only pursue initiatives with a potential upside that vastly outweighs this guaranteed initial loss.
Large companies often identify an opportunity, create a solution based on an unproven assumption, and ship it without validating market demand. This leads to costly failures when the product doesn't solve a real user need, wasting millions of dollars and significant time.
Economic pressure forces leaders to prioritize immediate, bold actions over incremental gains. This creates a stigma against continuous improvement, which can be perceived as slow or lacking strategic impact. The mandate is for massive, transformative change, not small, sustainable steps.
Every change introduces a temporary performance decrease as the team adapts—an 'implementation dip.' This guaranteed loss often outweighs the uncertain potential gain from minor tweaks. Real growth comes from compounding skill through repetition of a working system, not from perpetual optimization.
Jacobs's team uses the acronym WOTWOM—Waste Of Time, Waste Of Money—as a rapid check on new ideas. Any suggestion can be challenged with this label if it doesn't clearly contribute to organic revenue growth or margin expansion. This simple tool creates a culture focused on high-leverage activities.
Teams often focus on perfectly implementing frameworks like OKRs or Discovery, creating a false sense of achievement. This "alibi progress" prioritizes methodology correctness over creating value in a specific context, leading to lots of outputs but no outcomes.
Proven operating models like the Danaher Business System aren't widely adopted for three reasons: they require immense discipline, their benefits take years to materialize (conflicting with short-term PE fund timelines), and most investors lack the hands-on operating experience to implement them credibly.
