Cost Vs. Time – What’s your mindset?

Many years ago, I was introduced to the concept of two competing mindsets – the Cost Mindset and the Time Mindset.  The two appear mutually exclusive – you have to come down on one side or the other…. but which is right?  I’ll share a couple of recent experiences with you.

The story of these mindsets is simple – both are approaches to squeezing out the best possible profit from a project.  Yes…. I used the “p” word…. as it is of course the very reason we undertake projects in the world of work – to benefit from the profit we make.

The Cost Mindset adopts a strategy that limits the purchase of materials, and particularly tools, to the absolute bare minimum required to do a job.  Doing so limits excess purchases, reduces waste, removes the need for surplus storage and of course keeps as much money ‘in the kitty’ as possible.

The Time Mindset adopts the opposite strategy.  It invests in anything that might be required to get the job done fast.  Enough materials are purchased, with spare to avoid having to wait for resupply.  The best tools are bought, regardless of cost, so that the job can be done as quickly as possible.

At first sight, the Cost Mindset looks like the best strategy – and I think it’s fair to say that the vast majority of projects undertaken adopt this mindset as the obvious route to preserving profit.  But is that really valid in a world where “time is money”?

I’m going to “come out” right now as a Time Mindset person.  I will admit that there are certain drivers behind this: I love gadgets and I REALLY love tools… especially really good quality ones! But am I living some crazy, hedonistic life of excess?

According to a recent colleague, I am.  I was privileged last month to work for three weeks on a new house build, as a subcontractor to a local firm of builders.  The job handily filled some time between other projects, gave me a chance to think, and taught me a lot about how larger buildings are actually put together… knowledge that I am putting to use on my latest project (but more about that later).  During week two, I was introduced to the company’s sliding mitre saw by the site manager.  “Be careful with it” he warned – showing me that his right index finger was an inch shorter than his left…. When I used it, I could see why – it was an outdated, undeveloped piece of kit with a nasty kick that, if used without care, would pose a danger to any misplaced digit.  It was a pain: its limited capacity meant multiple cuts were required for larger joists – and its wobbly base made it hard and slow to achieve accurate cuts.

Not me: Image courtesy Bosch Professional

Not me: Image courtesy Bosch Professional

Sitting in my van at that same moment was my own top-of-the-range Bosch Professional compound mitre saw (above) – the complete opposite in its power, refinement, safety and accuracy (it’s even laser guided :-)).  We’d bought it in order to make the previous observatory build easier – and boy am I glad we did.  It was used intensively for several weeks on that job and it helped us achieve an outstanding finish.  The next day, when someone else was doing battle with the site saw, I brought it out.  It’s no exaggeration to say that jaws dropped.  One of the lads was taking pictures of it to send to his dad.  Needless to say, this second half of that job was much easier and I was finished much sooner.  When the guv’nor visited site later that day, he asked me how much the saw cost.  After I confirmed the price at just over £900 he cleared his throat and announced – “Oh! Well we won’t be having one of those then!”.  He could clearly see the benefits but wasn’t going to make the investment.  I was later told that he has a policy of “no more than £200 spent on any tool” – which, looking around, seemed about right. In fairness, the chap’s been in business for 25 years, so he must be doing something right.  I started to question myself…

The next day, the lads were busy cutting timbers for a new section of roof.  Big timbers.  Each was being bird-mouthed (a v-shaped cut in the end of the timber) or cut and mitred to the appropriate length.  I knew, that with their unfortunate combination of an old circular saw and a handsaw, the job was taking far longer than it needed to.  The technology to do it in half the time was there, sitting in my van.  I bit my tongue – after all I was the new guy on site – but I realised at that point that I remained sold on the Time Mindset.

You may have noticed that I didn’t really “promote” the Time Mindset too heavily at the start of this essay.  But what possible advantage can the Time Mindset have when you are being paid by the hour?  Surely the best economics are to keep costs down and if that strings the job out a bit, so much the better? Not in my view.

The first benefit of the time mindset relates to the job in hand.  It’s done quicker.  Whilst that might mean you can’t charge as much (you were charging for time), at least you’re free to go and get on with another job (most people complain that they have a problem with not having *enough* time). You’ve also got a seriously happy customer, who will (on average) recommend you to at least four of their friends.  Coupled to that, when you turned up with everything you needed, and some serious-looking tools, they knew they were in good hands, so they left you alone to get on with it.  You’ve got a customer for life there.  Your investment in that tool just became an investment in a customer…. cool!  That next customer was pretty glad to see you there a day early, too 🙂

The benefits are even clearer if you’re working to a quoted price.  Every man-day spent on the job – especially other peoples’ man-days – are costing you money.  Just having my saw on-site saved my builder friend £100 worth of my time.  If he’d given any other carpenter or joiner a saw like that, he’d have made his money back easily within a month.  They’d have also been further ahead on the job, with a happier customer.

The saw is a nice, easy, visual way to explain this concept, but during my 10 years in IT I stuck vociferously to the Time Mindset too.  I knew that every time I had to wait for my computer to “catch up”, my projects were falling behind.  Every time a customer under-invested in their servers, it was hurting their business and costing them a whole load of unnecessary support hours that my engineers could have spent on new projects to push their business forward.  I remember once being so passionate about this issue that I tore up a client’s quote right in front of them, all but the one page that would make the biggest difference to their business – replacing an aging machine that was creating a huge support overhead – which was then slammed on their desk. I can be scary sometimes…. but we got the job.

There are many more examples I could give you – but I’ve probably made the point.  The only question to answer is this: is there a balance between cost and time?

The answer, of course, is yes, and in my life I have worked happily alongside many Cost-Mindset colleagues, including my own brother!  Whilst my grandfather advocated leaving dropped nails on the floor (“it costs more to reach down and pick them up than to use another one”) there are few with as polarized a view as that. When I got a nail in my car tyre a few weeks ago, it cost me a couple of hours to get it sorted out!  This balance varies depending on your situation of course – and in some businesses, the balance will change over time.

Take startups.  There’s a reason that most startups need to receive large cash injections as soon as they prove that their concept is worthy: they need to get it built, working and on the market quickly, before someone else beats them to it.  Slowing things down to save a few quid can be suicidal: whilst spending heavily shortens their ‘runway’ (the time they have left before they run out of money to make it happen), costs at this stage will be far outweighed by a successful launch.  Some of the most successful companies in the World absolutely burned through cash in their early years once they knew they were onto a good thing.  It needs to be kept in proportion (as Amazon’s investors would no doubt like to impress upon Jeff Bezos) but the time mindset usually wins.

Thanks to Rodney Buckland for converting me to the Time Mindset almost 20 years ago. Comments welcome.

 

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