As soon as budgets get tighter the biscuits get cut. I noticed this the first time when the company I was running was owned by a bank and at one of our regular meetings I was informed of this major assault on the bank’s budget. What surprised me more is that within a few months they started to sneak back – first if they had important guests, then less important ones (like me), then if there were Directors present, etc. What a load of rubbish!
Well we are back to biscuit cutting times. I went to a meeting which was attended by three middle level managers of our county council about three weeks ago, and the biscuits had gone. Those three managers had shown up in 2 beemers and a merc (no carpooling then) so the message was clear: ‘we are serious about cutting but we do not have a clue how to do it’. Business as usual then.
Years ago I worked with (not for) a major US company which every few years had to cut the head count. I never understood this. If you want to cut costs look at salaries, not at head count. So what did they do? They made dozens of their lowest paid employees redundant, or even more clever, they would outsource the functions with lots of people in them. That way they got rid of the head count but conveniently forgot they were adding a large management fee to the cost line.
Within the year they found out what the cost was of this exercise and the ‘heads’ would creep back in so they could repeat the exercise a few years later.
No, Dave has got it right – focus on the expensive people. It is not just their salaries which are killers, but a lot more. Expenses, big offices, PAs and other support staff, pensions (the real killer), cars, etc. On top of that there is the hidden cost – the cost imposed on the rest of us as these people sit in their big offices trying to think of clever ways to justify their positions and coming up with regulations which are slowly grinding the country to a halt.
The same rules apply in Enterprise Britain. In one company I tried to work with, the MD was taking over £250,000 a year and had all kinds of family members on the payroll but not active in the business and gave them petrol cards and mobile phones. He would then go to meetings with essential but low paid staff and cut their meagre wages and then drive off again in his brand new Range Rover. Mixed messages?
At least he did not cut the biscuits – he never had them in the first place – and yes – his business did go bust.