How to Cut Costs and Become More Efficient

How to cut costs and become more efficient

Here is a good motto to memorise "Complexity and waste thrive on each other"

You want to achieve your goals. In order to do that you must:

1. Maximise your productivity
2. Minimise your costs

Efficiency is the ratio that relates your productivity to your costs:

1. High productivity and low costs= high efficiency
2. Low productivity and high costs = low efficiency

If you are inefficient you will lose ground to those who are more efficient.

In order to gain efficiency, consider the following five points

1. Complexity and waste thrive on each other
2. Simplicity is good
3. Separate the method from the goal
4. Ask what for? Rather than why?
5. Divide things into three classes

• Those that help you to progress
• Those that don't help you to progress
• Those that hamper your progress

1. Complexity and waste thrive on each other

The human mind has limits. Once you go beyond your mental limits you become confused and make mistakes. Over complexity causes the mind to fail, because it is unable to process the volume of information presented to it. Therefore needless complexity is to be identified and cut out.

Over complexity is bad because:

• It costs money to create and sustain
• It does not add any value
• It is the cause of error

2. Simplicity is good

If "Complexity is bad", then "Simplicity is good".
The mind must operate within its limits. That means that information must not exceed a certain level of complexity.
That means the information presented to the mind must achieve a certain level of simplicity.

Occam's razor

William of Occam was a 14th century English logician and Franciscan friar who created a principle called Ockham's razor.
The principle states that "Entities should not be multiplied beyond necessity." Sometimes it is quoted in one of its original Latin forms to give it an air of authenticity:
If you want to impress your mum, memorise this!

"Entia non sunt multiplicanda praeter necessitatem"

It means "Entities should not be multiplied beyond necessity."

Things should not be multiplied beyond necessity
That means "more complexity is NOT necessarily better"

i.e.
If two solutions can solve the same problem, the simplest one is more preferable over the complex one.

Implication

Look at what you are doing and simplify it.

3. Separate the method from the goal

Define your goal and recognise that anything not related to your goal is a relative waste of time money and effort.

In order to simplify you must know what you are trying to achieve (the goal) and separate the goal from the method of achieving it.

• The goal is "the object of your desires".
• The method is the "means by which you are trying to achieve the goal"

Many people do not distinguish between the goal and the method and they mix them up.

Then they make the mistake of committing themselves to a certain method, in spite of the fact that it is not helping them achieve their goal.

Example:
The writer is committed to using his typewriter and won't change to a computer

It is right that you stick to your goals

Commitment to your goal - refusal to give up on your goal- is the character of determination: a positive trait.

It may be wrong to stick to your current methods

Commitment to your method - refusal to give up on your current ways of doing things- is the character of stubbornness; a negative trait.

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4. Ask what for? Rather than why?

We do things for good reasons, but the reasons eventually become traditions.

And blindly repeating tradition is irrational and wasteful.

Rather than ask "WHY? Which gives us the historic justifications, it is often better to ask "WHAT FOR?

What for? Meaning:

• "For what purpose?
• "With what intent?

Asking Why? Tends to justify the method already in use and tends to work against simplification.

Asking WHAT for? Tends to challenge the method already in use and tends to work in favour of simplification.

5. Divide things into three classes

Divide things into three classes

1. Those that help you to progress
2. Those that don't help you to progress
3. Those that hamper your progress

Those that help you to progress
There are some processes and people who are actively helping you to progress.
You should identify, encourage and reward these people.
Those that don't help you to progress

There are some processes and people who are NOT actively helping you to progress.
They are coasting: taking out of the system without contributing anything valuable in return
i.e. dead-weight

You should identify, challenge and inspire these people to upgrade their performance.
Those that hamper your progress
There are some processes and people who actively HINDER and thwart your attempts to make progress.
They are insurgents, undercutting and frustrating your progress.
You should identify them and see if you cannot enlist their cooperation.

If you cannot change them, you should act to eject them from your team.

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