Penny wise pound foolish!

Aren't we all pennywise and pound foolish, at least some of the time? So why blame anybody?

The austerity drive launched by the government is nothing more than mere tokenism as is quite apparant to anybody who cares to think. By shunning executive or first clss flights, the government personnel are expected to save the exchequer several hundred crores of rupees. Very commendable! The action also earns a lot of brownie points for the politicians, especially before elctions. The only thing is that, barring Maharashtra and Haryana, no other state has elections in the offing!!

So, the government saves several hundred crores of rupees. But it has also announced a 5% increase in dearness allowance (when corporates are freezing salaries and issuing pink slips in the wake of the economic slow-down!) which is estimated to increase its spend by 2300 crores of rupees!! Whoa!!

And what about the "damned elusive" administrative reforms? What is the price being paid for creating and maintaining the behemoths in the shape of ministries, government departments, commissions, etc, etc? How does travelling by train or flying economy class help in reducing this monstrous cost of inefficiency and imperfections that the nation (read us) is paying at the behest of the government? If the idea is to set an example then the question arises has it succeeded? Are all the politicians and bureaucrats, down to the state levels, cutting across all levels, even contemplating any such sacrifice?

The point is, easy as it is to nitpick on the government at the drop of a hat, one has to bear in mind that others are equally guilty of such "penny wise pound foolish" tokenism.

It brings to my mind the classic case of the transnational company, my earstwhile employer, whose dalliance with tokenism was not only legion but also severely detrimental to the organisation in the bad years. Invariably, when the chips were down and the moolah was not falling like manna from heaven, strict diktats would be issued to drastically cut expenses. However, the sacrificial lamb was always either marketing expenses or travelling costs or training costs, or all three!! Nobody looked into the question of productivity in the factories and retail stores, which, due to the years of appeasement of the trade unions, was a major cause of financial bleeding of the company. Nobody examined the lack of competence in the human capital caused by flawed HR policies which only succeeded in propagating populism and nepotism among the members of the management. This only resulted in the creation of a huge workforce of largely ineffective and unproductive people...at what a cost! Nobody even questioned the antediluvian practice of holding and maintaining enormous estates which, during the bad years, only sucked in the company's scarce funds for non-revenue earning purposes. The focus would rather be on reducing telephone calls, cutting down on travel and even freezing training programmes.

I would have imagined that, during lean periods, the marketing and sales people need to be more in touch with the customers than normal to boost sales. This would definitely lead to higher travel costs, for instance. They would need to step up on their marketing spends to push sales up. Also, it is sound policy to retrain the staff during downturns because that is when work pressure is lowest on them. The increased costs of business development is unavoidable during downturns. Otherwise, in the absence of promotional activities, how will the enhanced results come about? Economies need to come from other areas like advance buying, inventory management, waste management, reduction in imperfections in operations, higher human resource productivity, ensuring standard output from plant & machinery, etc

The tokenism that we encounter is perhaps the result of two forces that work in most organisations. Firstly, such actions catch the imagination of the people more easily. Secondly, the main issues are often difficult to tackle and are thus kept on the back-burner with the hope that, someday, someone else will be there to handle them.

In the meantime, the bad days pass, there is an upswing in activities, progress returns and the austerity measures are shelved without actually having achieved anything in the first place, except, perhaps, some amount of showmanship.