The Paradigm of Cost

“You’re damned if you do and you’re damned if you don’t.”

We have all heard this expression uttered regarding political choices, professional sports, and a plethora of other things.  However, lately I have seen situations where it has been applied to business more than anything else.

Business is a fine balance.  On one side you have operating costs and on the other you have revenue.  On one side you have business beating down your down to give you money for the thing you sell, on the other you have the possibility of a dry spell ending your company.  Quality too is a fine balance, you either cut corners by having too few resources on staff, or you end up overstaffed and you bleed money.

How does one weigh this balance?  Where is the line drawn?  All business wants to grow, but growing too fast can cause a bubble to form and pop, causing everything you’ve worked for to come crashing down. Stagnation is also a worry, do you invest time and money into every new productivity enhancing product on the market or do you let things continue working as they have.

I have a few thoughts regarding this and I would like to share them with you.

First, the idea of understaffing and overstaffing is a concept that was invented by someone with a good understanding of numbers and little knowledge of the intangibles.  You should always have at least one resource on deck to help wherever help is needed.  Also of note is that not all resources are at the same level so simply hiring on help when you have more business is not really feasible as everyone has a learning curve.

Second, technology pays for itself, always.  This statement has a caveat that the Return on Investment for a piece of technology always has to be based on time.  Time is the most valuable thing a company has and if you can save your employees time by giving them faster computers, streamlining workflow, simplifying processes, then do it.  It saves time and that time can be use for other company related activities (you know, working more).

Third, more hours DOES NOT equal more productivity.  Well it does in short spaced out bursts, but not on death-marches.  People are not machines (and even those wear out).  A person might be getting the sleep and food they need, but they will wear out mentally after a while and either quit, do their job poorly or simply crash at a critical moment.  You hope that the work load returns to a normal load before these happens, but hope does not build multi-billion dollar enterprises.

Finally, I want to encourage all business owners to not nickel and dime themselves today in order to supposedly stay afloat while sacrificing the future.  Products do not progress evenly, those that pour time and money into their product will end up with something that is easier to market and sell.  So, does what Google does and push the envelope on technology and be better off for it.