Penny Wise and Pound Foolish

The recession has hit companies where it hurts and caused all of them to take a good, hard, look at their spending habits in the past couple of years.  While it makes perfect sense to ‘turn every dollar over twice’ before spending it, going too far can actually have exactly the opposite effect.

Everyone knows that time is money, but often businesses only think about time in terms of the how much is spent to produce things, and somehow time wasted on bureaucracy never seems to matter.

This Penny Wise, Pound Foolish mentality effects not only productivity but, far more damaging, morale as well.  When people spend too much time in meetings, or jumping through hoops to avoid spending small amounts of money, then they start to wonder why they bother.  Eventually they either leave or become so used to inefficiency that it no longer bothers them – at which point they stop trying to improve.

So, with a nod to Jeff FoxworthyYour Company May be Wasting Money if…

  1. If the agency fees spent to replace people is more than the bonus you could have given to the knowledgeable employees that left, then you may be wasting money.
  2. If a senior executive is personally involved in approving a box of pens, then you may be wasting money
  3. If buying a pen is not allowed because you already have a pen to sign the stationery request form, then you may be wasting money
  4. If you invite 25 people to a 3 hour meeting because “you don’t want anyone to feel left out”, then you may be wasting money
  5. If you hire one of the ‘Big 4’ consultants for a long term project because you “don’t want the cost of hiring permanent staff”, then you may be wasting money.
  6. If your entire department is required to fill out the monthly timesheets two weeks before the end of the month, just so that you can make the reporting deadline, then you may be wasting money.
  7. If the amount of extra effort required to maintain old systems costs more than replacing those systems, then you may be wasting money.
  8. If your staff are typing the customer statements because you don’t want to spend money on a new printer, then you may be wasting money.
  9. If the paper generated fulfilling a hardware purchase weighs more than the hardware being bought, then you may be wasting money.
  10. If the technology is obsolete by the time the approval is received, then you may be wasting money.

I wish I could say that the above were tongue-in-cheek but, sadly, some of them are very real examples of how time is not valued as it should be.

A company where I used to work would have long meetings with 40 people (including many highly compensated senior managers) in attendance, just because they didn’t want people to feel left out – how much did THAT cost?

Everyone should be encouraged to keep meetings short and attendance to those that can add value or benefit most from the information.  Also, just because the default meeting time in Outlook is an hour does not mean you need to take an hour.  Trust me when I tell you that if you end a 1 hour meeting 15 minutes early people will love you for it.

So, as you go about your daily business, keep an eye out for things that are just plain wrong.  When you find them, don’t just complain about it, try to make a difference.  Remember the old saying – It is better to light a candle than to curse the darkness.

I have heard that the people who went through the Great Depression have a real eye for minimizing waste.  Hopefully our current generation can learn those lessons again.

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2 Comments

Filed under Career, Life - or something like it, The Human Condition

2 responses to “Penny Wise and Pound Foolish

  1. Amen…my friend…amen….I can relate to this one. Great post!

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