Why Spending Money Won’t Solve Your Problems
Think twice before you spend money or hire new employees to solve a short-term problem. Here’s why.
Someone once told me “Fast answers are usually neither…”
Smart advice, but unfortunately, most business owners have to learn it the hard way. Think about when you are trying to fix a short-term problem in your business. Your first reaction is often to throw money or people at it. If you have the resources, you try to hire or outsource. If you don’t have the resources, you complain and wish you did. For short-term problems, however, money and people are usually not the answer.
People are not solutions, they are problems. Hiring new people takes time and focus away from the business and away from the problem you are trying to solve. Think of all the time spent interviewing, hiring, training, and on-boarding new hires. In the short-run, you do not add a solution, you add another problem! This is true even if the person is a remarkable hire. People are not solutions to immediate problems, they are investments in long-term growth. If you have a short-term problem, then hiring isn’t the answer.
Money is not a solution, it’s a trap. Similar to people, companies often throw money at a problem, hoping that buying a new technology, or even another company, can fix this year’s issues. Buying your way out of short-term problems only provides temporary relief. Just like paying a landlord one week at a time, the problem will be back in a week asking for more money.
My recommendation is to exhaust all other options in solving short-term problems before you either hire or spend. The list of alternatives is long and often the best options are specific to one business or industry, so I can’t name them all. But here are a few options to consider:
1) Check your process—When manufacturers have problems, they often look at the basic steps in their process to determine if each step is producing what it is designed to produce. If one step is underperforming, then the entire system will underperform. Dive deep into your processes and see if there isn’t a step in your system that is creating problems downstream. Focus on fixing it internally.
2) Replace—Sometimes hiring more people is really just covering up the real issue—that you have the wrong people doing the job in the first place. Now, I understand the contradiction in advising business owners to replace employees in the same article that I tell you not to hire. My point is not to hire MORE because you have the wrong people. Find the right person for the job and replace the employee that was in the wrong role.
3) Plan your strategy—Too often owners and executives hire or spend to make a short-term annoyance go away, rather than planning for what would make the business better in the longer term. Aggravations can get priority when enough voice is given to them. Instead of spending money or hiring new people, plan a strategy to optimize the business.
Of course, there will be times when you will have to hire and spend to solve problems. Just don’t let it be your first response…or second…or third. Make it your last.