dispatches from the new world of work

100 Ways to Succeed #80:

The 1% "No brainer"

A strategic consultant taught me this years ago: "In the early afternoon, right after lunch, tell your participants, 'We're going to do a 30-minute breakout. Your task: Cut your current budget by 1%, no more and no less. Then we'll spend 15 minutes reporting back so that we all can get the hang of it. Anyone can do it. You will thus pay my fees 10 times over—and do yourselves a big favor.'"

Wow.

I know all the arguments about the problems with budgets, across-the-board cuts, rolling budgets, etc, etc. Still, we all have cost issues. So whether you run a 2-person firm (or a one-person firm, for that matter), or a 723-person unit, this afternoon ... gather your leadership team, or everyone in the department, and take 1% (no more and no less) out of your budget-projected annual costs. As my colleague said, anyone can indeed do it—and it must not absorb more than an hour. Repeat now and again.

You'll be surprised how powerful this is—with a $100,000 projected cost, you can reap a $1,000 reward rather easily. (I do it with personal finances in particular.)

It adds up.

Tom Peters posted this on 01/08/07.

Comments

And certainly a more enlightened approach than hiring freezes and layoffs that create a chilling effect on anything worthwhile in an organization.

Posted by David Porter at January 8, 2007 8:31 AM

Tom - please buy one of these Bill Gates' backed Eclipse MicroJets - $995K as a "1% - 50% travel solution" long-term. http://www.thedesertsun.com/apps/pbcs.dll/article?AID=/20070107/BUSINESS/701070311/1003/business

Posted by sean_microjet at January 8, 2007 9:55 AM

Small things in strategic places have the greatest impact.

Posted by Michael at January 8, 2007 10:06 AM

Tom,
Long time fan, first time contact.

I have the pdf's for 100 ways to succeed 1-25 and 26-50, but I can't find one for 51-75. Can you or your staff point me in the right direction? thanks, John

Posted by John Newland at January 8, 2007 10:08 AM

I do this same thing on a personal level this time every year.

I grab a monthly bill, say the phone bill, call the phone company and say I want to cut my phone bill by (%5,10,15) on this call. What can I do?

I save money every time and get in control of my monthly budget.

Do this once every year. As we gain more "stuff" we almost always lose track of the details.

Posted by Jack at January 8, 2007 11:00 AM

Simplicity is the Key :-)

Posted by Trevor Gay at January 8, 2007 11:23 AM

Quarterly, I review my personal expenditures looking to make 20% reductions...its always possible...doing so lets me find the foolish monthly wastes, etc..that usually add up to ~5%. I institute those cuts. I let the remaining 15% discretionary spending continue, but it gives me more peace of mind knowing I could cut them too in an instant.

Posted by Scott Segal at January 8, 2007 1:10 PM

Risk management naturally also is key - the enterprise should be ready to same day move funds from equity accounts to cash instruments given worldwide developments.

Posted by sean_risky at January 9, 2007 8:55 AM