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SHOOT COSTS FIRST, ASK QUESTIONS LATER

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CostsIf there is one thing I love is cost cutting. I like to picture myself as a Cost Terminator, a Judge-Dredd-of-Splurgecity. It is somewhat a tantric  experience to see that grease-cost-fat-ball sticking out, ready to be knifed out! :D

Costs are evil forces that have to be driven out as much as possible. Is like if you are living in a desert future, in a city full of cost-zombies, in which you have to kill them as much as possible to survive (you will never end with all of them, but keep the body count!)

We should always ask: would I really lose profits if I eliminate that?

People will always complain when you start cost cutting. This is part of agency costs. People also don’t want to be disturbed. And a lot of people LOVE HIGH COSTS! Think about it, how many professionals prise themselves about the number of employees on the team or the size of their budget, but little about customer satisfaction or some unique deliverables! And more: with more money, people can deliver fancier stuff (and appear and grow more) without putting that much sweat on!

As a Conselleur once told me: “your duty is to achieve the highest level of employee satisfaction, reinforcing meritocracy for the lowest cost possible”. Wise, because doing all that with unlimited amount of money is easy!

It’s easy to achieve high employee satisfaction with a lot of money. It’s also easy to increase meritocractic feeling with that (just give lots of money to everybody). THE ART IS TO DO EVERYTHING WITH THE LOWEST COST POSSIBLE!

If you cut costs, people will always complain. Cut a little and people will scream. Then, you cut a little deeper (more and more scream). Then you cut again, until they faint! Sadistic?! NO! The thing is, you can never go wrong with costs! If you make a mistake, you can always go back later – so better be ruthless!

There are a few things that I like:

  • Budgeting: business love to a) replicate last year budget or b) replicate and update with inflation or c) replicate and add a “safety fat” because they know that it can be cut! So the best is the “zero-base cost”. Make people justify for every new thing, year after year! It is hard work? Of course! But it is worth!
  • Payments: I sign every check. It means that I am signing the $1MM state-of-art training program check, and the $10 coffee break check. You can’t go deep on everything. But randomly, select some payments and do realities check. Once a got an employee asking for reimbursement because her shoe broke during a weekend she spent in Brazil. Description: “You know how the streets of Sao Paulo are”. Shoot this type of stuff! Be ruthless!
  • Make spending difficult: I’m a little intimidating when people ask for money. This means: always give a hard time when the request is to spend more. If the case is strong, I approve. If not, so sorry. Always make asking for money a difficult, painful process, so only the “necessary evil” may survive,
  • Suppliers: that deserve a specific post, will do it soon :)
  • Consistence: you have to walk the talk and scrutinize very seriously if you want your message to be taken seriously

Know a lot of people like that. If you have other tips to cut deeper on the skin, pls share! And let’s partner up next time we see that fat, rotten, slow cost-zombie wandering around – lets gran our best guns, aim to the head with a smile in your face, and make the world a better place to live!



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