Thrift

I was at a conclave of CEOs and heard the CEO of Wipro speak. He talked of how his company is recruiting trainees all over the world but first flying them down to India so that they can spend the first year in a village working with an NGO to implement projects. He said that NGOs are typically cash strapped and they find out ways to live within their means. He said that this was the best training that Wipro's trainees could get because they would get lessons on thrift.

My thoughts went back to my dad who always said that a Rupee saved is equivalent of earning two Rupees because the former was in your control. He taught me the basics of thrift. How to live within your means rather than finding ways to spend and then trying to figure out how to earn to match the spends.

I have seen many companies invest and expand, hire people and find that the cost structure has suddenly become very high. They, then, figure out ways to scale up and if that does not work out, start scaling down. How many times have you faced a situation where travel is frozen or hiring is frozen or there is a layoff of people.  All this is because, we do not follow the principles of thrift when plan expansion. Thrift is all about spending carefully or managing your self in a way that your future spends match the future flows of income. It is about valuing every Rupee or Dollar that you have in hand and figuring out what is the best use of it.

"Industry, thrift and self-control are not sought because they create wealth, but because they create character", says Calvin Coolidge. This is absolutely correct as thrift is all about self-discipline. Thrift is not about seeking out the best bargain that is available. As Sydney Carroll says, "A bargain ain't a bargain, unless it is something you need." Thrift is all about self-restraint and steadfastness to weigh all expenditure and savings. It is about being able to divert your resources to what is meaningful to you.

When you are managing an organization, thrift is essential so that you prioritize resources. However, this can cause problems as people do not know why you spend on certain things and don't on others. These "others" may be the things that some people in the organization want. As in everything else, communication is key to thrift. You need to communicate appropriately across the various levels in the organization as to what you want achieved and why you are directing your spends the way you are doing so. That helps level set people's expectations and also improves employee and customer satisfaction.

Many years ago, I was invited to an all-employee meeting of a company. This was a new company set up in the outskirts of the city and was going through its initial year of start up pains and pangs of growth because business was coming in. So, they were continuously hiring but the work load was far too high. As the Managing Director addressed the team, he spoke of the vision and the goals/targets. During question hour, someone asked him if he would consider providing transport facilities to employees as this office was in the outskirts and public transport was not great. To which the MD responded,"Our company is not in the business of transport".

I was surprised at that response. This MD was a fantastic person. He was thrifty. He respected money and resources and used it carefully. So, a statement like this from him surprised me.I still believe that the communication could have been done better. He could have explained the situation the company was in and that it could not afford providing transport facilities at that point in time. He could have ended stating that he understands the lack of public transport but is not in a position to help as he needs to manage his resources to meet the needs.  Actually, this is exactly what he wanted to convey but ended up stating something else. So, what you convey and how you convey it also becomes essential for employees to understand why you are doing whatever it is that you are doing.

Being frugal or thrifty does not mean cheap. It is about being wise in the way you spend and how you reduce waste. As you reduce waste, you find out new ways to save and invest. It brings about self-discipline and restraint in whatever you do. You start looking at things differently. You enjoy and simple things in life. Most importantly, you channelize your resources in to things that matter to you in life.