Catalyst Strategic Consultants

You see it in the developing world, but it’s apparent here too. Instances where the “budget cutters” got a hold of a line item and created some immediate savings in the form of false economies.   Being Scrooge.

Many of these immediately detract from the image the entity is portraying. Toilet paper. Paper towels. I’ve had some issues lately [ you don’t want to know] that makes me a bit of a connoisseur of these consumables. What more direct manifestation is there of how a host regards his customers or visitors? The Calgary Airport offers thin single ply. What does that mean? In order to protect your hands [which is the idea] you must use twice as much! If the paper towels are thin – or another later trick, downsized – users more than make up the quantity to dry their mitts! And in the process think, “What a chintzy outfit!”

In the second world, one encounters fixtures made of thin gauge metal or have insufficient chrome covering to protect against deterioration. So when you hang your bathrobe up and it falls, broken coathook beside it, you as a guest feel bad and the hotel just has to go out and get another one. This condition is not restricted to Costa Rica! At a family recreational Club [nameless] cut out lots of expense in building their locker rooms. The result? There’s not quite enough room in the closets to hang a winter coat properly. They left enough room for the hangers, not enough for one with a coat on it! And now they’ve had 3 years or so of repeatedly clogging sinks, they’re having to look at buying what they should have spec’d at the outset – solid washroom fixtures that can stand up to heavy use, work and look good.

Now I’m not writing this to complain about tissues and sinks. The point is that people reviewing costs whether when building a facility anew or looking for “savings” in operating expenses often look in the wrong places.   They often take satisfaction in just knocking down figures on a sheet as if there are no compromises involved in their “all-knowing” decisions.   At the end of the review, they get up, puff out their chests and wonder why it takes their superior intelligence to save 15%! Meanwhile, the victimized presenter of the plan may be sitting there mortified with how she can possibly work with this outcome without ruining the whole undertaking. If you defeat the purpose you’re shooting for, you’ve shot yourself in the foot.

I’m not saying that budget reviews are an egotistical stomping grounds [although the worst, ill-thought out ones are]. The question should always be: “What are we giving up by cutting this?” You can do far more by looking hard at revising your business model or process mapping to look for useless steps or low value loops. Now we’re talking!

A Quantas A380 has to go back to Singapore and make a hairraising landing with over 400 on board: a success only due to the very best in piloting. The worldwide fleet was grounded for a month or so. Doubt was cast on this fabulous airplane that suddenly no one wanted a ride on.
The cause? One aluminum pipe conducting engine oil. A thin walled version that couldn’t stand up had been used instead of a heavier gauge. Someone saving money.

I’ll never forget a client creating his dream retreat on the cliffs above Ganges Harbour on Saltspring Island. The steep sloping lot 300 feet above the tide line had set him back lots and he wasn’t planning to skimp on the “cottage” either. Except when it came to the design. He’d found a quick [and cheap] solution there!

When I looked at the plans, I couldn’t believe it. I asked him “What’s the main attraction of this property?”
“Looking at the boats coming in and out of the harbour from up here.”
“Well, unless your designer makes this huge sundeck out of glass, you’re not going to see a thing below floor level!”
The design called for the wooden deck to extend straight out from the port facing living room, blocking out the desired view.

On the cheap. Hey, no one wants to pay more than they need to for anything. However, quality will out. Don’t defeat what it can bring you. Cheap sends many messages. Not many of them reflect well on the sender.

Sincerely,
Doug Bouey
Catalyst Strategic Consultants Ltd.