Lower the Water and Expose the Rocks

Money, Frugal, Lower the water, Lean ManagementWhen teaching Lean Management to businesses we often use the analogy of a ship sailing upon the water. The water represents waste. But beneath the water lurks the rocks. The water represents our resources of people, time and money. The rocks represent our problems, opportunities or inefficiencies.

In life and in business when we encounter problems we often choose to work around it instead of correcting it or we just throw money at the problem. Frequently we take the path of least resistance or simply bypass our difficulties. For example, companies often buy new technologies because they never took the time to figure out how to leverage the systems or talent they already have. At home you may choose to outsource a repair or maintenance because you don’t want to be burdened or don’t believe in your ability to address an issue.

Over a decade ago my wife and I both worked. We had one toddler that was being shuffled back and forth to daycare. I had a 6-day work week and a one and half hour commute. Time was a rare commodity and to make the most of it we often chose to pick up dinner on the way home.

The extra 45 minutes we didn’t spend cooking and the half hour we didn’t spend cleaning dishes was spent on the couch watching our regular TV shows. In the moment, it seemed a good use of our resources for a little more quality time. In retrospect how much quality was there in staring at the TV?

Using the sailing analogy we were filling the lake with more water, covering up our rocks. This “water” was costing us an average of $600 a month in dining expense! What were we thinking?

Fast forward a few years and we had a single income. I had taken a salaried position with a major corporation for the benefits and the opportunity for my wife to stay home with the children. Our household income was cut in half. Making the adjustment in lifestyle was a challenge but in order to survive, we had to change. Our “water” had been lowered and we were forced to address the “rocks”. We had to dial back our spending and adjust our lifestyle significantly. We learned not only to be efficient with our money but also with our time.

In the past two years, millions unexpectedly had their “water” lowered due to unemployment. Many have been forced to survive on less; some have managed well; others have not.

When your water has suddenly been lowered it’s best if you don’t dwell on the pain of the moment, consider the long-term benefit. When your financial situation stabilizes or if it returns to the pre-layoff income levels you will know how to continue living on less. You will be more conservative and more frugal. The short term pain will result in a long-term gain.

The real lesson to be learned however is that we always can find opportunities to improve if we proactively lower our own water level. I think about the years we routinely ate out. Had I considered the long-term implication of our spending habits; had we set a budget for ourselves we could have found a way to spend more time with our family and save money.

This reminds me of a great saying that was circulating recently. “Bad habits are made in good times; good habits are made in bad times.” Living a lean life is, in part, about consistently improving. To improve first requires recognition of the opportunity. One mechanism you can use to identify your opportunities is to proactively lower the water in order to expose the rocks.

Challenge yourself by determining your average spending habits and then reducing your budget. If you don’t wait until you are forced you will be better prepared to deal with a layoff or reduction of income if it ever happens.

 

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