Saturday, July 23, 2022

The long-shadow of "compliance" induced costs

It is reasonable to suggest that inspectors and other workers given the task of ensuring compliance to regulations "auto-calibrate" and issue a constant number of citations regardless of the actual status of what they are inspecting.

Psychologists who study heuristics and decision-making tell us that humans have three calibration nodes. We are intuitively well calibrated for 50:50, 100:0 and 0:100. Actual distributions that "should" be something different, say 80:20 slide to 100:0 or 20:80 slides to 0:100.

Put yourself in the shoes of an inspector. For the sake of argument let's say you visit dairy farms and inspect the premises for compliance to State sanitation requirements.

If you never write-up a farm (0:100) then there is no point in having inspectors and you lose your job.

You might write-up half of the farms you visit. If you wrote-up the last farm then you give the next one a pass. If you gave the last farm a pass then you issue a citation for the next farm.

Alternatively, you issue a citation at every farm you visit. They might be substantial issues like dairy cows wading through udder-deep manure or they might be chicken-shit issues like light bulbs dimmed by dust. Regardless, you justify the citations because you think you are making every farm "better".

Of course, people learn to play the game. They leave one thing for the auditor or inspector to find, one thing that is easy to partially unscrewing one light bulb i.e. "burned out bulb" which is very economical to fix before the inspector's next visit.

Medical environments

I suspect that the administrative side of the medical business creates costs far beyond the payroll they pull down.

Some amount of administration is desirable. It is stupid to have an M.D. ordering soap and towels and scheduling housekeeping personnel.

The problem becomes administration that adds burdens rather than off-loads burdens. The problem are the administrators who police the proper use of pronouns and who mandate "fluff" education sessions on the endlessly evolving science soap-opera of victimology rather than education about C. diff and signs of domestic violence.

Multiple layers of administration

Mark Nissen is a consultant in California and he was asked to investigate why the United States Navy had trouble keeping items like gray paint and toilet paper in stock.

The short answer is that every purchase over a million dollars required four levels of approval and the final approval had to be made by a full Admiral. The Navy is a huge organization. Nearly everything they buy is purchased in amounts that exceed a million dollars.

The problem was that each approval layer "bounced" 50% of the purchase orders for some issue over grammar or lack-of-clarity over the specifications.

If you looked at the approval process as a series of four, black-boxes then each box had twice as many P.O.s coming in as they passed on to the next black-box. Furthermore, the rejects were returned to the original submitter.

Take an imaginary week when 16 purchase orders are submitted to the Ensign on Monday. He bounces half and passes 8 on to the next desk. On Tuesday the officer at the second desk bounces four and passes 4 on to the next desk. On Wednesday the next officer bounces two purchase orders and passes two on to the Admiral. On Thursday the Admiral approves one P.O. and bounces one P.O.

On Friday the entire office goes to lunch with Air Force Purchasing and nothing gets done.

The officer tasked with buying toilet paper or ketchup or gray paint must submit the same P.O. with corrections for chicken-shit objections 16 times before it randomly rattles its way through the auto-calibrating "bounce 50%" bureaucracy and the purchase can be executed.

Why do we know they are they "chicken-shit" objections? Because the Navy has been buying toilet paper and ketchup and gray paint for a hundred years and all previous buys provided adequate cost/quantity/utility. The previous purchase orders obviously specified the product with enough detail for a successful buy to be made.

The fatal flaw

That is the fatal flaw of layered compliance administrators in Human Resources.

Additional duties are created for line personnel who are actually saving lives, additional duties that involve chicken-shit, made-up problems.

Somewhere, somehow the professional malcontents convinced policy makers that it was the organization's responsibility to make them happy...even if it made the other 95% of the workers supremely unhappy. Maybe that was the malcontents' goal all along. Misery loves company. Twisting the organization into knots makes results-oriented people very unhappy.

It used to be acceptable to tell the malcontents "If you are unhappy here, quit. I understand McDonalds is hiring."


  1. Yes. Administration is self perpetuating and always expands. It always put itself first.
    And over the last 20 years, administration and compliance have been the majority of new jobs in most places- I've seen studies that is some states, such as New Jersey, ALL job growth in the last 20 years has been in administration and compliance.

  2. Size always breeds inefficiencies. And lazy people always seek jobs where they don't have to produce but instead get to "manage". And you can't justify being in "management" if you don't have anything to show for your time. Thus "managers" always create more and more BS layers for actual workers to wade through. And the layers ALWAYS increase....once a rule becomes a rule it's like a "government program". It becomes eternal. Been in healthcare 45 years. The amount of "regulatory burden" I am forced to deal with has more than tripled in my time. I spend more time shuffling papers than actually with my patients.....and I'm in a HANDS ON patient care position.

  3. All bureaucracy is configured to have the brakes of a 40 ton semi truck and the engine of a lawnmower. In other words, it is much easier to stop something than to get it moving and through the system, easier to say "no" than "yes".

    Phil B

  4. Ditto what Dan and Jonathan said. RE: jobs @ McDs, the pendulum IS swinging back that way. Seeing it in the building trades. Scores of bodies float thru on a miscellaneous Monday, most never make their 3rd day, and thats ok. After 2 weeks, you've got 1 or 2 real candidates. The rest quit or get fired. Thats how it works now, throw everything against the wall, save what sticks. Reminds me of the curmudgeonly old foreman that would berate you until you quit or learned to do it right. Companies still using soft gloves have no workers (allegory to our military, but I digress).

    Agree whole heartedly that the parasitic class has a grip on much of our world. That being said, more and more people are simply ignoring it (aka Banon ignoring the J6 subpoena). I regularly ignore the stupid that gets in my way.... being 6-4@250 helps I'm sure.
    Not to segue, but i think thats where this all is going. Half the folks are working towards greater layers of control to bring about their utopia, and other folks are learning to simply ignore the other half.
    THATs gonna cause a fight. Insert Eric Cartman's "respect mah authoritah!" line here.

  5. Ya know, it dawned on me... its not the layers and costs thats the problem (those are symptoms). Its the blind compliance thats the issue. Nobody asks critical questions anymore, they just comply. I heard 'tinfoil hat crackpots' (raises hand) say this would happen because ours schools were teaching indoctrination and compliance, not critical thinking and free thought.

    I recently had an argument with a nursing home admin over masks... she acknowledged that the statistics say they don't work, yet she was only interested in enforcing my compliance. I mentioned the Nuremberg guards were just doing their job too, and she went apoplectic. It was truly fun to watch...
    My father is on deaths door and moved from hospital to rehab, gotta have a booster. Why? Its summer, he's already double jabbed and double boosted? Because you have to comply. They don't believe this 3rd or 4th booster will make a difference, nor do they care! They just want you to comply.

    1. Out here, some people and companies are quite reasonable, but others are as bad as anything in the big cities.
      Masks are a great example - last year we went to a doctor in a hospital that didn't require masks. It was owned locally. Here, in the middle of nowhere, the hospital makes a huge deal of them; it's owned by a big group.
      Same thing with companies I work with here - the medium sized locally owned are flexible and do a good job; the big ones have LOTS of paperwork, lots of problems, and are losing workers...

  6. Box tickers. I hate the lot. I had to go the VA building in Austin once for a service call. I dumped my pockets in the little bin: Old Timer Stockman, change, screws, a couple 1/4x20 nuts, and some other junk I had picked up. I had policed up an old brown 44 Mag shell at the range a week before. It was in the pocket litter, too. Old "rent-a-dick" saw it in the little box and blew a gasket. "WHAT IS THIS?!?!?!?!?" "It's a shell casing." "Why do you have this??" "Found it at the range last week. I wudda swore I threw that in with the rest." "Why did you bring it here?" "It's a piece of brass, inert, spent. It's a mishapen penny." He hauled out an evidence envelope gingerly placed the 'nehustan' in, and held it by a corner as he went to their office. "You can pick THIS up on your way out..." When I left he walked me to my van before he gave it back. Next visit, they took my pocket knife. I asked him to accompany me to my service call so he could use his dagger to open all the boxes I had waiting on me to install. 0:100 Zero pass, 100 Fail.

    1. I once had a TSA squirt try to confiscate the P-38 can opener that I have carried on my keychain since 1966.
      I told him, "Ain't happening. I went through too much to get it."
      Older inspector down the line looked to see what the fuss was about and yelled, "For God's sake, let him through!"
      He looked me in the eye and, with a sad shake of his head, said, "These kids..."
      On another note, when I was an environmental health inspector I would announce my inspections in advance by scheduling them with the business owner "for a convenient time." If there had been deficiencies, they were almost always corrected by the time I got there. Compliance. Isn't that what we all want? I loved writing, "No violations noted at time of inspection."
      Yeah, if there were real conditions that represented a risk to the public, you betcha I'd write them up. The operator knew I was coming and let hazardous conditions continue anyway. Usually only had to do that once.

  7. All true, and don't get me started on HR... F'ing useless self-replicating bureaucracy.

    1. All of HR, half of Accounting, a third of Physical Plant Maintenance, a quarter of Housekeeping. And that was at my final employer. TGIR-Thank God I'm Retired!

  8. My neighbor runs a herd share organic dairy . He tells me the state inspectors will dress up and visit him trying to get him to sell some raw unpasteurized milk so they can bust him . They have even cussed him when he wouldn't sell milk without a herd share . He says regulation compliance has doubled the price he has to charge for a gallon of raw milk . He gets $8 a gallon and still has to turn customers away . If someone were to drop a nuke on Columbus he could sell milk for $4 a gallon

  9. RE Navy procurement.
    When I was working we made a gizmo that was considered essential for all surface ships. No working gizmo, no go to sea. The USN understands that a sailor can break, lose or impregnated anything on the planet, hence spare gizmos were to be kept in depot locations around the world. The spares were shipped to the vessel and the broken gizmo was shipped via the depot to us for repair. What could go wrong?
    1) There were never any spare gizmos except on paper.
    2) The entire procurement process for repairs and service is even more convoluted the the purchasing of new items. We could not open a shipped box containing a unit until an inspector was present. That might take months and the inspector had no idea what the gizmo was. Once that was done we sent a quote on the cost of repairs, the repair contract had to be modified, the unit fixed then the contracting contact notified to send the same inspector who never was in a rush to look at the gizmo. When I left we had one sitting for inspection for 8 months,
    3) Anything wrong or different on any paperwork causes the machinery to stop. We were purchased 4 times in 20 years by different companies and each time it caused massive problems do to the changes or lack of changes to our Cage Code.
    4) Never underestimate the ingenuity of a Navy Chief. I would get THE CALL from a vessel in some port that had a broken gizmo. Usually it was from an E-4 or O-2. There would be a great wailing and gnashing of teeth. If you got an E-7 or O-4, they would give you the ship's credit card and we could complete the repair and have it back on board in 5 days anywhere on the planet circumventing the whole repair bureaucracy.
    5) Once in the system, it stays in the system. We had improved the gizmo but the US Navy only wanted the old one because it has a national stock number. We never got anyone a NAVSEA to generate one because they didn't have the money to test the new improved unit. We sold the new gizmo to the USAF and several other navies.


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