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The "Fast, Good and Cheap" Analogy

In its simplest form, businesses have two growth options:

  • Increase sales
  • Reduce costs

In tough economic times, it can be challenging to grow sales. Cutting costs can appear to be the simplest and most direct way of improving profitability. But at what cost? Recently our company was invited to submit a proposal on a strategic review of the market, competitors and options for a video production company. The company specialised in mining services and the decline in the mining market had dramatically affected revenues. They were seeking to review their options and understand how they might grow their business outside of their traditional mining markets. The project was clearly defined in a scope of work. We submitted a proposal that met the requirements and ensured there were sufficiently skilled people and adequate time to complete the work to a very high standard. It was a competitive pitch and we didn't win the work. The project was awarded to an organisation that had submitted a quote 50% lower than our proposal. I was perplexed and simply could not understand how anyone could do the work required on such a small budget and still deliver a high standard of work. It turns out they couldn't. I telephoned the company a few weeks after the project ended. To their credit, when I asked them how the project went they were honest with me and told me they believed they had made a mistake. The firm who won the work did not do a good job. Apparently they were underprepared and had not completed even basic market research prior to commencing the project. The available budget was spent on bringing the consultants up to speed, leaving no time or money to do the actual work. What the client was left with was a document that contained interesting facts about their business (which they already knew) and no solutions! I am reminded of the Fast, Good and Cheap analogy where you are asked to pick any two. The Fast (Time), Good (Quality) and Cheap (Price/Resources) triangle suggests all three properties of the project are interrelated, and it is not possible to optimise all three - one will always suffer. In other words you have three options:

  • Design something quickly and to a high standard, but then it will not be cheap
  • Design something quickly and cheaply, but it will not be of high quality
  • Design something with high quality and cheaply, but it will take a long time

So keep this in mind - if you shop on price alone, you will most likely sacrifice quality and/or time. If you shop for value, you will get quality work that is adequately timed and for the right price. Contributor: Michael Field, Partner at EvettField.  

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