When you think of the word “algorithm” you might think of a computer producing complicated calculations that seem obscure and irrelevant.
In the book Algorithms to Live By: The Computer Science of Human Decisions by Brian Christian and Tom Griffiths they discuss a concept they coined called “Human Algorithm Design.”
Essentially, we follow algorithms every day without even thinking about it. An algorithm is really just a fancy word for “formula” or “recipe.” So, when we do simple things like following a baking recipe or knitting a sweater we’re actually using algorithms.
By becoming aware of these algorithms and how they work we can apply them intentionally to our lives and the things we do. This results in the ability to solve challenges in more efficient ways while saving massive amounts of time.
Our team believes strongly in the power of algorithms when it comes to guiding our clients through the sometimes murky waters of business. Once developed and tested, algorithms are consistently reliable, accurate and efficient.
One of our clients, a real estate company, needed assistance when it came to processing their sales agent’s commissions. The commissions can get pretty complicated involving a plethora of rules. Due to this, human error during this process is pretty likely and can result in either overpaying a sales agent or shorting them. You can imagine both situations get pretty hairy. Our client was in desperate need of an accurate, dependable solution.
During a period of several weeks our team met with them and asked a range of questions so that we could clearly understand how commissions were currently being calculated. It turned out there were certain rules that were used to calculate them. In fact, there were dozens of these rules and our team documented all of them.
We compiled all of the information gathered from our client and organized it into a flow. Our team began to see that some rules would override all the others. There’s always a specific order to an algorithm. For example, there were master rules that always had to be applied before secondary rules and so on.
What we found is that we were able to create an spreadsheet-based algorithm that would accurately calculate the commission of a sales agent in less than one minute. This process used to take our client 15-30 minutes for each commission calculation. The beauty of this algorithm is that it kicks out any errors, so our client no longer had to worry about overpaying and underpaying its agents.
The algorithm we created was accurate, extremely fast, the inputs were very easy for an administrative employee to work with and the calculations could easily be verified. Our client absolutely loves it because it allows them to feel much more confident about the way they’re processing commissions. On top of this, we’ve saved them about 25 hours of work each week. That’s over 1200 hours each year that can now be devoted to more important tasks and developments.
Understanding how algorithms work is extremely valuable and we are so excited that our team is able to bring this expertise to our clients. There’s nothing like seeing how much these improvements impact them so that they can devote their time to building the business of their dreams.
Time is the only thing we can’t buy and once it’s gone we’ll never get it back. It’s our most valuable asset. The Tembo Team is here to help you harness the time-saving power of algorithms so that you can make the most of your business and, ultimately, your life.
