Joseph Deeb
Company Doctor
In a bank branch in Sydney a customer service officer printed a stack of reports every morning, checked a few of them and sent the rest to storage unread, and among the ones that went to storage was a daily list of every client who had closed an account, so that the single document capable of explaining why the bank was losing its customers was the one document nobody had been given a reason to open. What makes that worth pausing over is not the oversight itself but where it sat, because the bank had been trading for fifteen years in a market it effectively had to itself, carrying an expense to income ratio near double that of comparable Australian banks and personnel costs at roughly twice the industry benchmark, and its net profit in one of those years stood at the level it had already reached seven years earlier, while staff costs across the same period rose by more than half. Nobody needed to explain the decline, since it was arriving every morning on a printout that went to storage.
In a marine operation I followed a single invoice from the moment it was raised to the moment it was paid, and counted thirty one stages and sixteen people, several of them repeating work that others had already completed, against travel invoices alone running into the millions annually. What struck me was not the count but that nobody inside the company had ever done it, and not because anything was concealed, since the paperwork crossed those desks in plain view every working day of the year, but because following it from one end to the other had never been written into anyone’s job. The reason it could not be seen was that the department doing the work sat in a different country from the operations it existed to serve, its scheduling function separated by a border from the vessels being scheduled and its verification function separated by another from the work being verified, so that everyone held a fragment and nobody held the whole, which is the condition under which a process becomes invisible while remaining in plain sight. No reordering of the sequence would have changed that, because the sequence was not the problem, the geography was, and the company eventually agreed, closing the site and moving the function to the country where the work was being done, which is to say that the thing finally corrected was not the invoice at all but the distance it had been travelling.
The same habit appeared in a different room, during a video conference between Dhahran, Dubai, London and Manila convened to discuss an accident aboard one of the vessels, where a man had gone down over a mooring line. Within minutes the conversation had settled on which officer was at fault, which is a remarkable thing to have established given that nobody present yet knew what had failed, though it is not hard to see why it went that way, because blame is the cheapest product an organisation manufactures and it is manufactured fastest where supervision sits furthest away, a name travelling upward cleanly in a way that an unresolved cause never does. It closes the file and it answers the question that was asked, and having done both it leaves the thing that injured the man exactly where it was found, waiting for the next crew, so that a fleet of that size learns nothing it can use, having been told who rather than how.
In an oil and gas operation held between European capital and a GCC yard, tens of trucks and other equipment stood idle or derelict, some bought and never once put into service, some under rental agreements on which payment continued month after month, processed by an accounting department with every reason to know that none of it had ever operated, while the operation itself ran short of the equipment it needed. The company had not turned a profit in six years of trading, and its investors, who sat in another country, were in daily contact throughout, receiving reports and satisfied that they were watching it closely, which they were, though what they were watching was whatever the operation chose to show them.
What might explain all of this? The forgiving answer is that institutions are large, people are occupied and things get missed, and it is a reasonable defence which would hold if the facts allowed it, but the report in Sydney was printed by hand every morning and carried to storage, so the labour of not reading it exceeded the labour of reading it, and the equipment stood in a yard that men walked past daily. Nothing was concealed in any of these organisations, which matters, because a failure that hides is an ordinary problem while a failure sitting in the open for years is something else, and against it the question worth asking is not why nobody saw it but why seeing it changed nothing.
What each of them shares is that the people whose money it was were in another country. The bank was run in Sydney and owned from abroad, so what reached the owners was whatever Sydney chose to send, and the ratios that told the story sat in accounts nobody with standing to act ever read closely. The equipment in that yard belonged to investors who were on the telephone daily and never once counted it. The marine operation answered upward to a parent so large that a few million a year lost in a single process registered nowhere in its accounts, which is the peculiar protection that wealth confers on waste, since an organisation only interrogates what it can feel. Across that distance travels reporting and nothing else, and the reporting is produced by the people being reported upon, which is why daily contact does not close the gap but disguises it, contact resembling oversight while leaving the largest items unexamined. The question that follows is not a moral one but a structural one, whether an institution can be built that verifies rather than receives, and what such a thing costs against what it saves.
That question does not change character when the institution is a nation state, though it becomes considerably more expensive and it acquires better vocabulary, so that a tariff is renamed revenue collection, money owed to depositors is renamed a financial gap, and the closure of a factory is renamed dumping. The name is what stops the looking, and it does that work in a branch office and in a central bank by identical means, which is why a sovereign importing technology, capital and industrial capacity from powers larger than itself faces the same problem as an investor whose equipment sits in another country, and why the question worth putting to resource rich nation states is not how much leverage they hold but whether they can see what is being done with their own assets before somebody else tells them.
My daughter asked me once what I do, and since I thought management consultant would mean nothing to her, I told her I am a company doctor. What I do is look at the symptoms, the fever, and from there I find the root causes, and then I prescribe the remedies and price them against what they return. That is the whole of the method and it has not varied much across thirty years, whether the patient was a bank, a fleet, an oil and gas venture, a manufacturer or a ministry. In a five star resort in the GCC it produced a forty percent rise in occupancy and a hundred and six percent growth in the European market inside six months, that market ending at sixty percent of the business. In a printing group of two hundred and fifty people it produced ISO certification through Lloyd’s Register and an integrated system built in house that linked cost accounting and budgeting through to production, procurement, sales and administration. In the marine operation it cut the invoice chain from thirty one steps and sixteen sign offs. At a Saudi Aramco company it introduced competency based training and Train the Trainer frameworks into an organisation where neither had existed. In the Sydney bank it produced that institution’s first cash flow lending deal in manufacturing project finance, together with the covenants and monitoring procedures written to carry it. In a ministry it produced a settlement between the state and its workforce, and the General Confederation of Lebanese Workers honoured me for it, citing the balance I had struck between the interests of the state, its citizens and its workers.
I founded Corporate Solutions in 1998 and have worked since across banking, oil and gas, shipping, mining, manufacturing, public utilities and government, on four continents and in three languages, which took me to six consecutive Lebanese Ministers of Energy and Water as their adviser and to the monitoring and evaluation function of a World Bank financed reform programme of four hundred million dollars, having come to all of it by way of an MBA in global strategy from Macquarie University and a double major in international business and economics from King’s College. I am now in Australia and taking on advisory and executive work. Enquiries are welcome on the advisory page.
What follows on this site is the same examination carried up to the level of nation states, where the sums are larger, the vocabulary is better, and nobody has yet found a way to make anyone look.