Real Savings Comes From Small Savings

Having created hundreds of budgets for corporations and organizations, and consulted regarding finances to even more, I have observed that one of the most prevalent mindsets is that saving a little bit of money is insignificant, because of the overall size of the financial picture. However, merely because that is a prevalent attitude does not make it either correct or accurate, and in the cases of either reducing or closing deficits, or balancing budgets, is absolutely inaccurate.

It is quite rare, unless an organization decides upon "Draculean" cuts in a specific area, or discontinued certain limited time or one time expenditures, that most of the cost savings can be found by making large "cuts." In my experience, I have found that a large number of small reductions in numerous areas, while "counting nickels and dimes" is indeed the most effective way of developing a dramatically reduced amount of total expenditures.

In my more than three decades of involvement in this activity, I have almost routinely been able to save enormous sums merely by evaluating every expense, and seeing if there is a better way, a more effective way, and a less expensive way of achieving a goal. Many fiscal officers of organizations, because they are predominantly untrained or inadequately trained in the fiscal necessities of organizational management, appear to fail to grasp both the simplicity and methodology required.

I have been often asked if this is so simple, and it works, why don't more fiscal leaders utilize this technique? There is never a simple reason to explain why individuals do or do not do something in a specific way. I, however, tend to believe that the "small multiple cut" method requires more evaluation, more effort, and a greater amount of understanding than looking to just make big cuts. Many years ago, one of my bosses, who was the Executive Vice President of a financial services company, enjoyed using the adage, "You know how you eat the elephant? One bite at a time!"

I have written and spoken for many years about the dire need for organizations to prioritize and emphasize leadership training, development and qualification. As essential as overall leadership development is, it is far more dangerous when fiscal officers are ill-prepared than when others are. Organizations without control of their finances, and without financial and fiscal stability, rarely flourish.