We all realize that time is fleeting, and before we know it the year is over and we haven’t found enough time to fit in all of the cost management initiatives we had planned for our organization. This fact is based on a corollary of Murphy’s law which says that, “routine work expands as time permits, thus driving out all time for higher level creative work,” such as cost management.
This law reminds me of a purchasing audit I was retained for a few years ago by a CEO of a large corporation who wanted to know why his Vice President of Purchasing was generating only meager savings for his corporation. After interviewing his purchasing executive and her buyers, I found that the purchasing executive was spending 80% of her time on capital equipment purchases (the balance of her time was spent answering phone calls and staff questions and attending meetings). Her buyers were spending most of their time processing routine purchase orders or expediting them.
When I got back to my office after the interviews I called the CEO for a debriefing. I stated that it was very clear to me that the reason his purchasing department wasn’t saving money was that they were caught up in routine work, thus leaving no time available for saving money for the corporation (Murphy’s Law in action). He then asked, “What is the solution to this conundrum?” I will now share with you the answer that I gave this CEO, since we all have the tendency to fall into activity traps and lose our focus on cost management:
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Set monthly, quarterly, and annual savings goals that you submit to your boss in writing.
There is no better self-motivator than making a commitment to your boss that you are going to save a set amount of money monthly, quarterly, and annually. Then, report in writing to your boss monthly, quarterly, and annually how you are doing against your savings goals. I can guarantee that you will meet your target savings with this tactic, because no one wants to tell their boss that they failed to meet their own goals!
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Carve out time daily, weekly, monthly, and quarterly for savings initiatives to meet your goals.
Savings don’t just happen by themselves; you must make time for them daily, weekly, monthly, and quarterly on your calendar. Start by breaking down your savings goals into daily, weekly, monthly, and quarterly tasks and milestones with completion dates for each savings project. For example, if one of your goals is to save 5% on office supplies by the first quarter, you would need to list all of the tasks, milestones, and completing dates for each phase of this project (e.g., establishing a cross-function team, investigating methods and practices, value justify specifications, bidding out office supplies, bid analysis, bid award, etc.). Then, place these specific tasks and milestones with completion dates on your calendar where they will be a constant reminder. This technique will keep you focused on your cost management projects.
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Delegate, delegate, delegate.
We all know what delegation means, but do we really do it? Frankly, most of us could delegate more if we really analyze our delegation habits, but we don’t because we think we can do whatever we are doing better than anyone else can. In reality this is a myth, especially when it pertains to cost management. Every organization has committees, teams, and individuals that you have possibly overlooked that can partner with you and champion your cost management initiatives much better, faster, and more thoroughly than you can individually. So use these forums and organizational resources to plan, organize, and implement the savings initiatives you are proposing. Then everyone gets credit and you get a big win!
As these tips suggest, finding more time for your cost management initiatives doesn’t need to be a daunting or intimidating experience, but preferably should be a natural extension of your routine workday. It all starts with integrating your cost management projects into your planning calendar, making a commitment to your boss in writing, delegating your project tasks more often, and getting started with these new habits today.