So something I often think about within the analyst community is what the role of creativity and ideas play. As analysts it can be uncommon to think creatively and often think more more logically.

The unfortunately side effect of this however is if one of us can’t solve a problem the rest, faced with the same facts and logical rationale, can’t solve it either. Additionally we can sometimes fail to seek out and be open to new ideas. Logically what we have or do today works, why change it?

There is a ton of research and development material touting much the same but the example I wanted to share is something I heard during a virtual conference recently and found quite astounding.

In the US, in 1986 seven million children disappeared from the tax records. Now assuming there wasn’t some cataclysmic event, what could have possibly changed? Well…

In the early 1980’s, an I.R.S. research officer in Washington named John Szilagyi had seen enough random audits to know that some taxpayers were incorrectly claiming dependants for the sake of an exemption (around $250 per dependant). Sometimes it was a genuine mistake (a divorced wife and husband making duplicate claims on their children), and sometimes the claims were comically fraudulent (Szilagyi recalls at least one dependent’s name listed as Fluffy, who was quite obviously a pet rather than a child).

Szilagyi decided that the most efficient way to clean up this mess was to simply require taxpayers to list their children’s Social Security numbers. Naturally the response was ‘no’, and his manager pointed out the approval process it would have to go through, the cost involved in changing the form, etc. Effectively why introduce cost and effort to something that ‘works’.

A few years later, however, with new leadership and a government desperate for more tax revenue, Szilagyi’s idea was reevaluated and put into law for tax year 1986. When the returns came in the following April, Szilagyi and his bosses were shocked, seven million children had suddenly vanished from the tax rolls, some incalculable combination of real pets and phantom children. Szilagyi’s clever twist generated nearly $3 billion in a single year.

Szilagyi’s immediate bosses felt he should get some kind of reward for his idea, but their superiors weren’t convinced. Eventually, five years after his brainstorm became the law, Szilagyi, who earned about $80,000 annually at the time, was given a check for $25,000. By this point, his idea had generated roughly $14 billion.

What really astonished me about this other than the amount is that out of the 10,000 odd employees that had worked in that department doing a similar role for decades, not a single one had presented the same idea. Something so simple, so obvious in hindsight. Perhaps if the I.R.S. had been quicker to recognised and reward Mr. Szilagyi more might have been inspired to follow in his footsteps!