New Year's Resolutions at Work
We'll start this New Year with a discussion of New Year's resolutions, either business or personal. Let's begin with two reasons why most resolutions never work out:
On the other hand, starting small and/or modest with your resolutions might lead to a happier experience. For example, I recently came across something that might qualify as a resolution for 2014 that isn't unreasonable and won't feed your pride or vanity. It has to do with taking advantage of small opportunities. But before we get to it, let's take a quick look at the economic concept of "opportunity cost," something we would be wise to apply in all our business (and personal) decision-making. I know, I'm diverting our discussion a bit, but stick with me; you'll see how "opportunity cost" can apply not only to our work, but to our spiritual lives as well.
For those not familiar with it, "opportunity cost" means "the loss of potential gain from other alternatives when one alternative is chosen." So in business if you chose between two (or more) alternative courses of action, you'd be wise to try and understand what you give up by not taking the course you rejected. Here's a simpler way to understand opportunity cost.
My father once told me how his mother (my grandmother of course) - an immigrant from a small peasant village outside Naples, Italy - would counsel him on allocating his scarce (more like meager) resources. (She actually didn't put it quite that way, but that's the way you'd put it if you were studying economics). If he wanted to buy a hot dog, she'd remind him that he could have earned interest on that money. In other words she was telling him to assess the opportunity cost of his decision to buy and eat that hot dog. I think he originally took the advice as a kind of "killjoy" comment, but eventually he got the idea and made better decisions with his money. (Now that I think about it, that may be why we managed to live what I thought was a life bereft of want, despite the fact that - looking back - we'd be categorized as "poor" today. Dad knew when to buy hot dogs and when to just save his dough.)
Back to opportunity cost, there are giant corporations who perform "opportunity cost" analysis on every decision they make. Of course, they employ teams of accounting professionals to do this, and perhaps, like me, you don't have a staff to provide complicated spreadsheets. Then again, remembering the hot dog example, you can use the concept to great advantage if you understand it.
Now that I think about it, given how tough the economy has been and continues to be for many of us, maybe an understanding of "opportunity cost" would lend a hand in any of us making decisions about how to spend our money not only in our businesses, but in our personal lives as well. So, for example, if you're thinking about taking a winter vacation (as many people do in the Northeast this time of year), try calculating what you might have done with that money to really improve your and your family's life if you forego those few days of warmth and sunshine just to avoid those cold winter winds and a few inches of snow.
Anyway, we've managed to wander from the idea of resolutions, but I hope you found our discussion of opportunity cost helpful. Heck, getting back into the swing of things after New Year's always takes me some time. It's like the New Year and I need some time to get to know each other and warm up to each other. So here we are now out of time for today, but next time, we'll see how we can incorporate this idea of "opportunity cost" into our daily work life so that it actually improves not only our work but our spiritual life too. Meanwhile, here's wishing you a Happy New Year!
- They're usually so grand there's no hope you're really going to accomplish them. For example, "I'm going to double my (sales, customers, salary) this year.
- They focus your efforts on something that's probably going to feed your pride or vanity. For example, I'm going to lose 30 pounds, and change my body into that of a Greek god.
On the other hand, starting small and/or modest with your resolutions might lead to a happier experience. For example, I recently came across something that might qualify as a resolution for 2014 that isn't unreasonable and won't feed your pride or vanity. It has to do with taking advantage of small opportunities. But before we get to it, let's take a quick look at the economic concept of "opportunity cost," something we would be wise to apply in all our business (and personal) decision-making. I know, I'm diverting our discussion a bit, but stick with me; you'll see how "opportunity cost" can apply not only to our work, but to our spiritual lives as well.
For those not familiar with it, "opportunity cost" means "the loss of potential gain from other alternatives when one alternative is chosen." So in business if you chose between two (or more) alternative courses of action, you'd be wise to try and understand what you give up by not taking the course you rejected. Here's a simpler way to understand opportunity cost.
My father once told me how his mother (my grandmother of course) - an immigrant from a small peasant village outside Naples, Italy - would counsel him on allocating his scarce (more like meager) resources. (She actually didn't put it quite that way, but that's the way you'd put it if you were studying economics). If he wanted to buy a hot dog, she'd remind him that he could have earned interest on that money. In other words she was telling him to assess the opportunity cost of his decision to buy and eat that hot dog. I think he originally took the advice as a kind of "killjoy" comment, but eventually he got the idea and made better decisions with his money. (Now that I think about it, that may be why we managed to live what I thought was a life bereft of want, despite the fact that - looking back - we'd be categorized as "poor" today. Dad knew when to buy hot dogs and when to just save his dough.)
Back to opportunity cost, there are giant corporations who perform "opportunity cost" analysis on every decision they make. Of course, they employ teams of accounting professionals to do this, and perhaps, like me, you don't have a staff to provide complicated spreadsheets. Then again, remembering the hot dog example, you can use the concept to great advantage if you understand it.
Now that I think about it, given how tough the economy has been and continues to be for many of us, maybe an understanding of "opportunity cost" would lend a hand in any of us making decisions about how to spend our money not only in our businesses, but in our personal lives as well. So, for example, if you're thinking about taking a winter vacation (as many people do in the Northeast this time of year), try calculating what you might have done with that money to really improve your and your family's life if you forego those few days of warmth and sunshine just to avoid those cold winter winds and a few inches of snow.
Anyway, we've managed to wander from the idea of resolutions, but I hope you found our discussion of opportunity cost helpful. Heck, getting back into the swing of things after New Year's always takes me some time. It's like the New Year and I need some time to get to know each other and warm up to each other. So here we are now out of time for today, but next time, we'll see how we can incorporate this idea of "opportunity cost" into our daily work life so that it actually improves not only our work but our spiritual life too. Meanwhile, here's wishing you a Happy New Year!
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