We assume that our activities in our company add value. Rarely do we consider the possibility that we spend our energy in ways that may actually reduce customer satisfaction while simultaneously increasing our costs. Yet this is a common phenomenon. One of the most remarkable aspects of organizations, unfortunately, is the determined resistance to discontinuing counterproductive activity. When you propose to reduce the number of people in your company who pick up the phone to answer customers' questions, you will not get too much argument. Everybody understands that such a decision will reduce customer satisfaction to some degree, but will also save the company some money. This sort of cost-benefit analysis is intuitive.

When you propose to discontinue counterproductive activity in your company, however, you will encounter strong opposition. People will fiercely and creatively defend counterproductive practices. Why is this so? Why is it easy to reduce and eliminate useful actions, but not counterproductive actions?

Let me give an example of (finally discontinued) counterproductive activity. For many years people had to remember to stop and pay airport tax as part of the process of taking a plane, hold on to their receipt to have it checked, and then hold on to it for reimbursement. Space at the airport was wasted, travelers' time was wasted, foreigners were confused: workers were kept busy slowing down China's air ports.

When new airports were built the system became bigger. In addition to the old windows where you pay to human beings, machines were designed where you could buy a new type of re-usable electronic card similar to a subway card. Then you could use your modern electronic card efficiently to go through a gate. Of course some people insert the card on the wrong side, opening somebody else's gate. More people were hired to show people where to insert their card. But people still needed a receipt for company reimbursement. So the subway style card machines were redesigned to spit out the old paper receipt when you went through with your modern electronic card. But some people then forget to take the receipt. More people are hired to say all day : ¡°Don't forget your receipt.¡± All these machines and people are employed to slow down China's airports while taking up the most valuable real estate in China.

Meanwhile, in Hong Kong and almost anywhere else, airlines collect the airport tax when people buy the ticket. In this way, people save time, airports receive tax money sooner, save salary expense, save space to rent at high prices to car manufacturers or real estate developers. Finally now we have copied Hong Kong and other places.

Many people were involved in the layout of the airport tax collection system, the location and signage, the design and purchase process of the machines, and employee selection and training. Somehow nobody asked if any of it was necessary. Why did it take so long to abolish the airport tax system?

I think the reason it took so long to abolish was because there was no good reason for its existence. If there is a reason, we can decide the reason is not good enough. But when there is no reason, we go look for reasons, we invent reasons, we resist change.

The airport tax is not a unique example. For several decades, worldwide, if you purchased by mail order with a credit card, the mail order company would send you a form to write down your credit card number, your name, and your signature. You had to fill out the form and mail it back before the company would send you the product. One man, Jospeh Sugarman, owner of a large mail order company, figured that he had no way of knowing anyway whether a signature was real or not, and that his business would be a lot more successful if people didn't have to spend the additional time and effort of waiting for the form, filling it out, and mailing it back. So he decided to fill out the forms and sign the forms himself. He signed all forms with ¡°Mail Order¡±. Only after about a million of these forms had been sent to the banks and been paid for did a bank finally contact him to ask about the strange signatures.

Today computer sellers or airlines don't ask for your signature anymore when you use your credit card to buy by mail or over the internet (except for Asiana airlines from South Korea who ask you to fax your signature plus a copy of the front of your credit card and a copy of the back of your credit card, creating a lot of work for you and for them too, explaining the crazy requirements, collecting the faxes, and then calling you back to tell you the copy of the credit card is not clear enough).

But hotels still like you to wait at the front desk to sign your credit card statement and perhaps also a copy of your bill when you check out. As a result they must hire additional people, plus they keep you waiting in line just when you want to leave. Annoying for you, costly for them, and not necessary for anybody. But I can see your doubt already. You think it is necessary. And I am positive that a hotel manager reading this wants to be on the phone or e-mail already with me to explain.

Don't explain to me. Explain to the Hilton hotel in Destin in Florida because they don't ask you to check out at the front desk. They slip the bill under your door the night before you leave and let you check out simply by pushing on a button in your room. Hotels have a copy of your passport and they have your signature and your credit card number. Why do they need your signature again when you leave? They don't.

But not everybody sees things my way of course. Some people truly love signatures. For example, there is the beautiful new Mandarin hotel in Quenzhou. Here my room service waiter came to my room at 11 pm to show me that my signature on my check-in form did not match my signature on my room service dinner bill. I felt sorry for him. I realized a higher level manager sent him; a busy manager working hard late at night, carefully checking the two documents with the signatures that looked different, perhaps fearing that I would claim that somebody else, somebody who looked just like me, must have broken into my room to eat dinner there, without my permission, someone who forged my signature, and that therefore I should not pay for the room service dinner. Coming to think of it, when I opened my door how did the hotel know I was me and not the man who had broken into my room and forged my signature in order to get free room service? Sometimes I think that madness is the normal human condition.

So when you try to cut costs next time in your company, ask yourself and especially ask your customers: What do we do that we should not do ? You might be surprised by the results. I did this exercise with a recent class of EMBA students at the China Europe International Business School and I will admit that they found some good examples for me.

Here lies an opportunity to save money and simultaneously improve the quality of service to your customers. Don't spend more to do more. Spend less to do less. You may discover that great service is vastly cheaper and much less work than bad service (aside from having the excellent effect of giving you more customers and more loyal customers). Be prepared to face some tough opposition though. Madness does not give up easily.