The global economy was beginning to falter and the big boss at global booze giant Whisky&More recognised it was time to rein in on costs. He reluctantly knew that it would also mean curbing the expenses of his hard-working and well-travelled senior team and he knew they wouldn’t like it, but it just needed to be done. He didn’t want any arguments, or debates – just action.
To bring his plan to life he appointed a Director of Cost Cutting who he charged with leaving no stone unturned in his hunt to save money and protect the company’s profits in any forthcoming downturn.
Just as the CEO suspected the senior team were not happy, saying that while it might save a little it was a huge distraction and there were bigger issues facing the company. The CEO quietly agreed but didn’t listen as although it was unpalatable costs needed to be cut everywhere including from his top team.
And so the newly appointed Director of Cost Cutting diligently went about his work. He checked every expense claim from the senior team, interviewed the various directors and their PAs and began to prepare his report to the executive team.
The report from the Cost Cutting Director was duly circulated and he was given half an hour on the agenda of the forthcoming executive committee meeting to explain his findings.
After a number of taxing items it was finally time for the Cost Cutting Director to present his paper.
The CEO introduced him, ‘I’d like to welcome the Cost Cutting Director to our meeting, and congratulate him on his excellent work to identify one million pounds of savings from senior expenses. I’d now like to hand over to him to set out how we will take this forward.’
The CEO then switched off and began reading other papers as the Cost Cutting Director began.
‘But have you actually read what’s in here?’ pressed one of the wily experienced directors to the CEO.
‘Look, I know you won’t like it but its got to be done,’ snapped back the CEO irritably, avoiding the question.
But the wily experienced executive wasn’t going to give in that easily, ‘But do you agree with the stopping of our laundry expenses?’
‘What laundry expenses?’ asked the CEO, demonstrating that while he had read the summary of the paper, which included the total savings, he hadn’t read the detail.
The Cost Cutting Director explained that senior managers, including the CEO, were spending tens of thousands each year on laundry at hotels and this seemed a legitimate area to cut back on.
The wily experienced manager sat back smiling having brought to life for the CEO exactly how the savings would be made.
His fuse now lit the CEO responded, ‘My senior team travel the world for weeks on end. They have early morning flights and breakfasts and dinners and many many meetings with clients. I want them to walk into appointments looking sharp, feeling confident, not wearing crumpled suits and shirts. They are ambassadors for Whisky&More. Thank you for your report,’ concluded the CEO to the Cost Cutting Director. ‘I have taken note of it and will tell the board that we conducted a review of senior expenses but no further action is required for now.’
Often the small things can make the biggest difference.