I think I discovered something. The keyword being “think”.

image taken form aijazansari.com

My house is undergoing renovation which means that we are now getting stuff that we long deserved but never mustered the middle-class strength to buy. One among these things was a full mirror where you can clearly see yourself from top to bottom. Now normally this should’ve been like a great thing. But not for me.

Thanks to the full mirror, I finally saw the hideous creature that processed cheese, irrational sleeping schedules, and a general I-don’t-care-what-it-is-I-am-hungry-so-give-it-to-me eating philosophy had made me. This meant that since the last two days, I have started a lousy running schedule every morning which is another way of saying, “I don’t get to listen to enough music”

So today morning on my run, (it was already 8:30, most people were showing up for work and I was still reeking of the cheesy fries I had last night) as I jog along the street, I see an auto rickshaw pull over by the side of an under-construction complex and 9 workers jump out of it. 9! I kid you not, it was a scene to see how they fit themselves inside. The unpacking talks about the sheer effort that went into the packaging to begin with.

Miraculously energetic and sadly malnourished individuals walk towards what their day as I move along but that image stuck in my head. Nine people in one rickshaw that I often loathe fitting three people into. I consider an uber overcrowded when it has 4 people plus the driver in it. I didn’t see any of them complaining. Now there could be a few reasons for their complacence but nevertheless, I couldn’t help draw parallels to my life.

I am sure they would easily get two autos irrespective of where they were coming from. They either felt powerless to demand for that luxury or were paying for it from their own pocket both of which are a justifiable stand to the final solution. But what was important was that they got there. Stay with me on this.

A lot of companies these days are facing the wrath of normalising economies. There are no bubbles bursting, a consumerist market is ever expanding and with more low quality players in the market, it has in fact become easier for older and larger companies to upsell their otherwise normal services. But the economy is slowly realising the oversold state that it was in and things are coming down to a realistic grind, slowly and steadily.

A lot of spends that were affordable in the earlier days are now being cut down and anyone who has worked long enough in a corporate knows what cost cutting means and the terror that ensues with it. Cost cutting as a process in itself has been accorded with all the negative connotations possible. A process that is otherwise supposed to help a company fix what was wrong. And a major reason why it happens that was is because no one is invested in the process of cutting costs.

Cutting them is like a checklist option for a lot of corporates. It’s something they need to do to make sure their balance sheets don’t look ugly and they don’t end up losing their shareholder’s money. And despite ESOPs, most employees usually have no say in the benefits of what cost cutting could entail, again, because their vested interest is miniscule and the cost of a cost cut is way too high. Which means that they only see the down sides to it which include funny things like, “no more than one coffee per person per day”

Maybe we could fix that if we take a slightly more unconventional approach, the way the workers did. What if we could turn a cost cut into an incentive?

Assume that a normal cost cutting operation would save an organisation 100 Rs. What if they turn it into a game and ask their employees to cut costs before a major recession actually hits and tell them that a certain fraction, say 10%, of the total cut will be funneled to them as a direct incentive.

This might look like a bait to begin with but what it does is far better. It induces a culture of cutting costs through innovation. Most employees would not have the financial tools to reach a major cost reduction but they will surely have their work at hand. They could effectively deliver more value for a smaller cost and end up not only making money for themselves but also build a culture of innovation, something that is dead in organisations these days.

While huge enterprises might find it difficult to do primarily because of the complicated math, SMEs could find this approach extremely useful in times when they need to increase productivity, reduce costs, and keep up the team spirit all at the same time.

People form an extremely critical aspect of any organisation. Their well being and proactiveness, along with their vested interest in the good will of an organisation is just as much an asset to a company as real estate is, and in most cases, even more valuable.

I am not corporate hot-shot but I understand unit economics and their importance. Oh I plan to write about that soon! And in the 24 years that I lived, life has taught me that nothing gives more long term value than good unit economics and happy people.