I am sick of hearing about the disasters and impacts caused by Bottom Line Cost Cutting Thinking. I am going to start this page to let people know about what happens when you irrationally cut costs to increase profits. When will Industry and Government learn that cutting corners usually results in higher costs, lost customers and disasters. Is the almighty dollar more important than life and safety? This is not condemning improving efficiency - when it is done with a THOROUGH ANALYSIS of the impact - upstream and downstream - and without the interference of MBA's and financial people. Sometimes increasing efficiencies has hidden cost increases or has associated costs to achieve the efficiency. You get what you pay for. If it will cost to implement the efficiency and it has a return ... why not do it? So what if it takes a few years to achieve. Rewards come to those who 'Do Something.' I think that part of every MBA/Finance program should have a class on thorough analysis, creative thinking and impact of reducing the bottom line.
- When all is said and done - I am willing to bet that the recent botched heart/lung transplant was caused by some MBA's brilliant cost saving measure. Is the bottom line more precious that a life?
- Was the recent Shuttle disaster caused by cutting corners and lack of funding? Was a technical analysis conducted or did some business person dictate it? Were technical people invloved in the decision and analysyis? Or was it the usuall Finance/Business bullies making the decision ... the usual words are ... "if you don't like it you can find a job elsewhere" ... I think this is part of the current MBA and Finance curriculum.
- Do Companies over-hire to increase profits and then indiscriminately lay them off when there is no longer a need. There are ways around this. For instance part time employees or job sharing (that would expand the amount of time worked, or time or shift) ... many people do not want to work full time, but would prefer part time work. Why not use experienced Contract employees when there is a large demand for workers. How about interns for non critical jobs? I'm sure if the business people gave this some thought they could come up with even more creative ideas.
- Are you tired of phone trees and matricies ... when is the last time you called a Company and actually talked to a human? How many buttons do you have to push to get the information you need or talk to a human. Does this help customer relations?
- When is the last time you found someone knowledgable enough to answer your question. The expert was probably layed off because they had a high salary that experience brings. But costs are down ... and so likely are customers. Or maybe they hired two or three lower paid people without knowledge.
- Were the two recent nightclub disasters due to trying to increase profits by reducing safety? Was it worth the deaths of some two hundred plus people? Will the final cost, after lawsuits, be more or less than having implemented some simple safety devices?
- Perhaps someday Industry will learn that you can't layoff or fire high paid experts (to reduce costs) and give the job to rookies. It leads to disasters. Like a well documented recent one. Also, you can't relocate and expect the experts to follow ... so you hire rookies and let them fail or discount risk analysis results. Or maybe the rookies aren't diligent enough and use a common measurement system.
Send me your examples and I'll post them ... Send to ...