The $18 expense report and the defunded intern programs: symbols of corporate America’s dysfunction

A senior vice president at Okta approved a gratuity that was $18 over the company’s threshold on a $2,000 dinner. The auditing system flagged it, a person wrote it up, an email was sent, his assistant processed it. It landed on the COO’s desk — routed there from the board. “I’m paying somebody to audit that expense report,” Okta President and COO Eric Kelleher said at a BCG-hosted breakfast roundtable at the Fortune COO Summit in Scottsdale, Arizona. “I’m paying somebody to flag that, and I’m paying somebody to write up an email and send to me, and I’m paying my assistant to receive the email and process it.” He let that hang in the air. “That’s waste.” Of course, we all know exactly why that process exists: someone built it and kept it that way. That person is almost certainly still in the building, certain it’s the right way to do things, defending the inefficient structure that everyone else has to slog through. That’s a lot harder problem to fix than an expense report. The disease: confirmation bias with a salary attached Fortune Senior Writer Phil Wahba moderated a conversation between Kelleher, FedEx Freight VP Patrick Maier, BCG Partner and Managing Director Geraldine Rhodes and IBM SVP Joanne Wright, digging into what every COO needs to master: the line items that clog up executives’ profits and losses. All of the guests described what happens when the people who design systems are also the ones evaluating them. “People who build a function over time. It’s hard for them to see where they can be optimized in what they’ve built,” Kelleher said. “They’ve built something the best way they know how, and they have a confirmation bias that things run the right way.” BCG’s Rose put a number on the cost of that bias: roughly 60% of executives surveyed by her firm have seen minimal or no return on AI investment—not because the