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Category: Culture

Is Organizational Friction Costing you Money?

Organizational friction is not a common term, yet it could be one of the biggest reasons that your company is not performing to its full potential.

How much is friction costing you?

Friction in human terms is the unnecessary resistance that a person encounters when trying to achieve a task. Organizational friction is the resistance created by policy, social, or environmental factors within a company.

Bad organization friction creates unnecessary resistance within an organization and impedes performance. It causes wasted time, wasted energy wasted resources, and overall frustration. Good organizational friction creates positive resistance that discourages negative behavior, sloppy thinking or risky shortcuts. 

Bad organizational friction impacts employees in multiple ways. It makes tasks longer, and more prohibitive which in turn can sap our motivation. The more friction that is present the less likely we are to partake in a positive behavior. Inversely, as Jeff Bezos states, “When you reduce friction, make something easy, people do more of it.” 

Let’s set the stage with a simple example of each type of organizational friction and the losses it can correlate to.

  • Policy – this is friction resulting from organizational policy or rules such as a manager requiring all team members to attend an hour-long meeting 2x per week when 10 of them only need to be in the meeting for 15 mins. Say those employees average $30/ hour. That’s $30 (hour wage) x .75 (wasted time in meeting) x 52 (weeks per year) x 10 (employees who could leave meeting after 15 minutes) = $11,700 in salary on one team alone, not accounting for billable hours and productivity. What if you have 100 teams all doing the same? 1,000 teams?
  • Social – this is friction that is caused by social norms or cultural expectations. Traditional hierarchy can lead to this type of organizational friction. If you create a culture that doesn’t encourage open dialogue and respond well to constructive criticism of leadership, employees will be scared to speak up because of the fear of negative social consequences. This can inhibit an employee from bringing up an issue that could have been avoided, such as doubling down on sunk costs, falling victim to groupthink, or making a poor strategic decision. These are some of the costliest mistakes an organization can make.
  • Environmental – this friction is caused when the infrastructure or processes in place create resistance to positive behaviors. Imagine creating an employee health challenge that encourages exercise during the day, but not providing access to shower facilities. Employees will be less likely to partake in the challenge if they need to go elsewhere to shower before going back to work.

Roger Dooley, a neuromarketer, first introduced us to this concept on The Behavioral Grooves podcast and in his book Friction: The Untapped Force That Can Be Your Most Powerful Advantage (link).

In the book, he uses the metaphor of a slide (the playground type, not the PowerPoint type, although PowerPoints can cause friction too). Think of behavior as being driven by the following*: a nudge (the initial push off of the top of the slide), the angle (the slope of the slide can be steep or shallow providing different motivation), and friction (the resistance to easily going down the slide).   

Companies can face friction in any number of places. Organizational friction inhibits employees from operating at their full potential. A report by Newtronix estimated $1.8 trillion is lost each year in the US alone due to barriers in workforce productivity.

Knowledge workers spend over 80% of their time in meetings and responding to requests. The average time an employee works before being interrupted is around 12-minutes. For an average company, each email that is sent costs roughly a dollar in labor costs – a midsize firm can easily spend over $1 million dollars a year, just on email.

Each of these factors has a cost to them. They reduce employee productivity, increase their stress level, lead to disengagement, and increase turnover – inevitably costing your organization money.

Some other examples of organizational friction points include:

  • Routing all expense reports through two layers of management
  • Communication that isn’t clear or well understood so employees need additional clarification on what they need to know or do
  • Copying more people on an e-mail than necessary
  • Requiring team members to come to an hour-long meeting when they are really only needed for 5-minutes
  • A culture that doesn’t support speaking out and is always deferential to those in higher leadership positions
  • Social norms about how much work gets done in a shift

If companies can identify where these friction points are and then remove them (or reduce them), the impact on the bottom line would be significant.  It is an unseen cost that is draining the energy and performance of people from across the organization. 

Navigate the slides below to see how The Lantern Group eases friction in organizations using behavioral insights.

The Lantern Group’s Solution to Organizational Friction

*Roger also includes gravity as one of the key aspects here but it doesn’t apply specifically to our discussion, so I left it out.  If you want to find out more, here is a really good short article on Dooley’s persuasion slide in a UX context https://sostoked.com.au/psychology-of-persuasion/

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