Today some colleagues were talking about a recent meeting they had with CxO-level executives of this very large company. One part of this meeting involved a several-hour discussion on one specific, relatively small topic (an outlay of less than $20K). They noted that at the very high nominal salary level of the participants, if the per-hour values of the execs’ time were considered, the meeting discussion quickly ‘cost’ the company WAY more than the outlay being discussed.
I have seen this at so many companies: they know to the penny the ‘time value of money’, but disregard the ‘money value of time’. For instance, they:
- “Reduce expenses” by instituting administrative policies and review procedures that drain their people’s productivity in ‘death by a thousand cuts’. (For instance, by putting knowledge workers in noisy, unsupportive, cubicle work environments to save office space costs)
- Use broad, time-consuming meetings to communicate and manage, instead of investing the effort to convey and handle essentials in a more focused, efficient way.
- Cut lower-salaried administrative support or buy cheaper, harder-to-use tools, then tell their highly-paid, scarce-skilled staff to handle those things for themselves in their spare time. (One company even dismissed the janitorial staff and told employees to take care of their own office trash and cleaning.)
These companies often say publicly that people are their biggest asset, but privately cause accelerated devaluation of those assets by draining their people’s morale and productivity, and accelerating attrition. Of course, expenses and budgets can creep, and reviews can be useful or even essential to survival. But if their balance sheets and ROI calculations included the true monetary value of their people and their time, many sub-optimal ‘cost-saving’ proposals would never get off the ground.
In reflecting on this tonight, I realized that the only organizations — entire companies or intrepreneurial islands — where I haven’t seen this happen (much) are the ones that are succeeding financially even through difficult times. (Admittedly, I don’t personally have experience observing a statistically representative sample of businesses, so I’m not trying to assert any universal truisms; just noticing a possible pattern among those I have observed.)
Have you see this too, or do you know of counter-examples?
Which do you think is the chicken, and which is the egg – considering the money value of people’s time, or being financially successful as a business?
