Communicating Via The Hub And Spoke Method: Avoid It! (September 2020)

One of the many things I try to improve with each engagement is the communication process. While not technically a financial topic, it certainly has economic impact. Inefficient communication causes delays in decision making, action, and business improvement and  burns needless cycles.

I am always frustrated by the hub and spoke approach, especially when it comes to resolving complex issues where the expertise of multiple parties is needed.  I find it’s like a bad game of telephone.  Joey said that Susie said that Tom said that we need to do X, Y, and Z.  When confronted directly, Tom will shake his head and remark, “That’s not even close to what I said”.

I was recently informed by a client that an attorney found a major problem with company actions compared to organization documents. I was surprised. I don’t pretend to be a lawyer but have been dealing with corporate legal documents since the very early days of my career. It would have truly shocked me had I (as well as others involved) all missed something so basic. When I asked for specifics, I really didn’t get anything other than “that’s what the attorney said”.  I sent a quick email to double check my facts and ultimately got a call spun up with the attorney. It turns out, he had the basic organization structure facts wrong. When I asked him where he got his information, he replied “That’s what is in my notes”.  Great! There were at least three conversations, two emails, and a week of elapsed time resolving this simple issue before we could reset and begin to move forward.  All of this was a complete waste of time (and money).

So, what could have made this situation better?  Rather than the initial call between two people neither of whom had all of the necessary knowledge, that call should have involved me, the CEO, the firm’s outside tax CPA and the attorney. Unless it is a highly complex issue (and sometimes even then) these calls can usually be accomplished in a 30-minute window. Had this been done, the other calls, email and week delay would not have occurred.  And I’d be trying to come up with a different topic for this month’s post.

I always recommend a call with all necessary parties on the line. Have an agenda. Let one person lead the call and keep everyone on point, avoid the meaningless chit chat at the beginning, summarize next steps at the end, and then hang up!

Now, I realize someone is thinking, “That’s an expensive call, our lawyer charges $x per hour, my outside CPA $y per hour, and I’m paying my employees to be on the call as well”.  But I can assure you that one call is a lot more efficient than the back and forth that almost inevitably ensues without it.

Hub and spoke communication:  Avoid it!

If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to [email protected]

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your cash is flowing.  know where.®
Ken Homza
Copyright @ 2020 Homza Consulting, Inc.


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