Any savvy bureaucrat knows that when budget cuts are looming, you talk about leaving alone what’s unessential and eliminating what is essential. That way, the public will agitate against the cuts.
In 1976, Charles Peters of the Washington Monthly dubbed this approach the “Firemen First” principle, as he explored and explained why firemen and combat troops, rather than desk-bound middle managers, tend to be at the head of the line to be whacked.
Some who are watching the fight in Washington over sequestration—the term for automatic spending cuts that are set to kick in imminently—see the Firemen First principle at play in communications from the White House. “Are they threatening to pare back consultants, conferences travel and other nonessential fluff?” asks conservative Charles Krauthammer in a recent column. “Hardly. It shall be air-traffic control. Meat inspection. Weather forecasting.”
Others counter that the “scare tactics” aren’t really scare tactics because the whole point of sequestration is that it’s indiscriminate; the process has been designed to cut with a meat axe, not a scalpel. “There’s not a helluva lot of flexibility,” G. William Hoagland, senior vice president at the Bipartisan Policy Center, tells Bloomberg.
Peter Drucker would never argue that the federal government couldn’t benefit from some slimming down. Already in 1968 he was calling it “fat and flabby rather than powerful,” and he liked to point out that it was “particularly endangered by organizational obesity.”
But his views on sequestration may well have been negative, precisely because the cuts would come across the board. To cut across the board (or increase across the board) “practically guarantees missing out on the future,” Drucker warned in Management Challenges for the 21st Century.
In no small part, that’s because an action of this sort does little to address the deeper problem. “If all that is being done is to cut costs without putting in adequate cost prevention, a recurrence of excess costs a few short years hence can be guaranteed,” Drucker wrote in Managing for the Future.
Instead, the recommended way to proceed is to instill in your organization an ethos of cost prevention rather than cost-cutting. “Cutting costs rarely gets much support from the work force itself: it means, after all, laying off people,” Drucker observed. “Without active work-force participation, however, none of the measures needed for effective cost control are easy to implement.”
Give your staff the opportunity to participate in the prevention of cost increases, and you will find yourself with enthusiastic partners. “Employees know where the fat is,” Drucker pointed out. “They also know that low, controlled costs mean better and more secure jobs.”
So sure, cut costs if you must. But that should only be “the first step toward building permanent cost prevention into the organization,” Drucker advised.
How do you approach controlling costs in your organization—and what could Washington learn from it?