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Opportunity Costs


Pragmatic Effectiveness and the use of Time and Money

Pragmatic Effectiveness and the use of Time and Money

Recently, a former student sent me a message on LinkedIn expressing "happy anniversary" wishes. In his note, The student, Greg, commenting on his experience in the classroom, noted how "pragmatic and effective your style can be"--I thanked him for the kind words.  The truth, however, is . . . that often . . . I am--wait for it--not so pragmatic and effective. For instance, I have a tendency toward the "cheap" when it comes to spending time and money--I blame it on the midwest "bailing wire" mentality where you value just "making do" with what you have. "Going to town," in this paradigm, to get a needed fix is almost an admission of failure . . . it takes you away from the work (time) and it requires the expenditure of money both viewed as slightly bad unless absolutely necessary.

This mindset is not all bad of course . . . but . . . when it comes to running a business . . . it can be a roadblock to evaluating the opportunity costs of your decisions.

Sometimes, a "cheap" mindset sacrifices efficiency in the business world and progress toward a pragmatic decision that would help "Git-R-Done." I know. I've often been slow to adapt--especially if the "cost" is in terms of time or money. But, I am learning.

Take my recent home project, for example--I am building props for our local home school melodrama that my wife have directed for the past 15 years. I needed to build an old-style newspaper rack for this year's version, a rack that will hide the revolver the hero retrieves to "save the day." The picture of the rack I wanted to re-create (from the internet) had tapered legs. No problem. I cut tapers regularly with my table saw. But, these leg tapers were tapers on a small piece (9 inches) of stock. (Truth be told, I've done this without the jig as well but it's a little, well you'll see . . .) This is definitely trickier and certainly more dangerous to do "free-hand." ("Real men" may now shudder over the fact I have done this in this cavalier way in the past.)

I decided that it was the "pragmatic and most effective" route to bite-the-bullet and spend the time and money to do it properly. Not only that, by creating a jig for this project, I would no longer be tempted to do it in the more dangerous "bailing wire" way. (After all, I really enjoy playing my guitar with all my fingers!)

Applying this to my business, here are a few things where I have had to weigh Pragmatic Effectiveness over Time and Money:

  • Hiring professionals. Accountant, graphic designer, videographer, social marketing consultant, editor.
  • Joining professional associations.
  • Going to national conferences.
  • Additional training and credentials.
  • Hardware, software, and internet services.
  • Yes, and even buying expensive books . . . it's that bad at times!

The bottom line is . . . the old adage, "You have to spend money to make money." certainly comes true. The same can be said of time. So in leading your business, do you see time and money as more important than growing and succeeding?

P.S.-- As a leader you do need to weigh the opportunity costs of decisions of course. I am not suggesting that you spend time or money "willy-nilly." Just don't over-value saving time or money where doing so will handicap your growth. Incidentally, I must be getting better at this! I hardly shuddered at all when--registering myself and an employee for the national conference--I pushed the "payment" button.


Here are pictures of the jig with a board where you would lock it in position, a close up of the legs I ripped, and the magazine rack itself (stage prop) . . . not yet painted. The jig worked quite flawlessly!