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Big companies (rather, people at big companies) WANT to spend money on this kind of stuff for all sorts of reasons. -A team might have use-it-or-lose-it budget

Big companies (rather, people at big companies) WANT to spend money on this kind of stuff for all sorts of reasons. -A team might have use-it-or-lose-it budget, so they have to spend it on something, and a contractor might be the lucky recipient! -Tax purposes! -Spending a lot on a contractor gives them someone to "fire" when they need to explain why something wasn't getting done or something went poorly! The list goes on! All that being said, as a consultant myself, I consider those types of projects windfall, as they tend to be the ones that end abruptly. It's kind of a scary feeling getting paid without actual work to do. I have found I 100% prefer the projects where there are clear tasks, goals, and results to report, if for nothing else than my own sanity.

_bxg1 7y ago
One would think the use-it-or-lose-it problem would've been solved by now. It's so obviously dysfunctional. Is there really no better way to determine budget?
- shyn3 7y ago
  Some organization have this issue where you get a budget for your group, and if you don't use it then upper management will think you don't need more resources next year and will budget less or even cut from your department. If you don't use it, they reallocate it to a department that needs it and you never get it back. Another part is where if you get a hiring budget they expect you to use it because if you aren't spending it on personnel then it means you aren't hiring the best available people at that time. Non-profits usually spend out their budget. Regulated utilities can charge a % + the cost of hiring you if it is a capitalized cost, i.e. hiring a contractor to implement a project.If a contractor works 100% on a capital project it's profits especially in a low inflation economy or when the profits are not going to be as good due to forecasting issues it can pump the books. There are probably other reasons I can't think of.
  - _bxg1 7y ago
    You just restated the problem in more detail. What I'm asking is, if the above system encourages managers to waste money, why hasn't anyone come up with a better system?
    - ghaff 7y ago
      In my experience, it's rarely about flagrantly wasting money for the sake of running up expenses to a budget level. Rather, it's usually more about pulling in expenses, doing something you had wanted to do anyway but didn't think you had enough money for, etc. Budgets are a pretty powerful and widely used tool for managing organizations. And there are other checks and balances. It's not like a manager can necessarily just decide to have a team off-site in Hawaii because there's room left in the budget.
      - _bxg1 7y ago
        Maybe I just put too much stock in that one episode of The Office.
    - pault 7y ago
      I think the disconnect is that you are describing it as a system, when in reality it's just a bunch of misaligned incentives and plain old human nature. It's unfixable.
      - radiator 7y ago
        It might be both of those things at the same time. This book claims so https://en.wikipedia.org/wiki/Systemantics https://en.wikipedia.org/wiki/Systemantics.
    - barbecue_sauce 7y ago
      There are systems that encourage the opposite behavior, but they tend to be damaging in other ways. It all comes down to the metrics that you are responsible for as a manager. I used to manage a grocery department at a well-regarded supermarket chain. In retail, one of the only inputs you can affect at the store level that impacts the bottom line is labor, so metrics are usually organized around labor optimization. Each week, you would be expected to exceed the previous year's Units Per Labor Hour (UPLH). This can only be accomplished two ways: increasing unit movement (which you really have no control over and is largely driven by consumer sentiment and population density) or cutting labor hours. In fact, even if volume is increasing, you can't even add hours even though labor needs scale with volume in a brick-and-mortar retail setting. To exacerbate things, the reductions in labor have already compounded yearly since the policy was put into place. They want you to squeeze water from a stone. "Well, So-and-So (who you've never met) was able to increase UPLH by 10% 5 years ago! Why can't you?" I guess my point is that systems that discourage waste often lead to insane work environments rather than cleverness or innovation, whereas encouraging waste leads to bloat and inefficiency.
- sneak 7y ago
  There are, of course, better ways; the thing is that non-dysfunctional methodology is not evenly distributed. This comes to mind: https://en.wikipedia.org/wiki/Recurrent_laryngeal_nerve https://en.wikipedia.org/wiki/Recurrent_laryngeal_nerve
  - _bxg1 7y ago
    I don't understand the relevance of that Wikipedia article
    - LeifCarrotson 7y ago
      That nerve is a popular example of an optimization process that produced a local maximum which is highly sub-optimal. For various evolutionary reasons, a nerve routing that was direct and sensible when the aorta passed to, say, the gills of a fish, now makes a silly, circuitous route in modern mammals from the brain, down under the aorta near the heart, and back up into the neck...close to the brain. Natural selection has proven incapable of fixing this tangle. Similarly, organizational budgets that departments need to spend any way they can or suffer cuts next year seem silly. But they stem from reasonable policies, gradually changing and improving over time. Just like an organism can't sever its aorta and have a better routing of the nerve, organizations are incapable of getting from the current budget situation to a better one.
      - _bxg1 7y ago
        Thanks for the context.
      - sneak 7y ago
        Wow, that’s a great explanation, and I hadn’t even thought of it that way, myself. My take was a much simpler “just because there is a better way that exists doesn’t make it practically relevant, because entrenched tradition is usually more popular/widespread than efficiency”... but your boiling the frog idea shows even better how the mess comes about in the first place.
- duxup 7y ago
  I think the issue is management unwilling to trust other levels of management to make the call when they need money / a strong desire some folks have to filter / make decisions for others. I don't know what the fix is for that except to take a chance and trust folks but ... it doesn't seem to be a thing and instead they come up with easy systems to just make arbitrary decisions and there ya go. It boggles my mind sometimes that "Like if you don't trust that guy to make decisions... why is he a director here?" Sadly it filters down, I've been places where it was clear the director of my department couldn't do much at all... at that point why should I be there, it doesn't matter if he and I talk, agree, or anything then .... Steve Jobs said something about it making no sense to hire people in decision making roles and not let them make decisions. Granted, Steve was also able to hire some fine people.
  - ElFitz 7y ago
    He also had some experience hiring terrible people. Practice may not make perfect, but it sure damn helps. As long as we learn from our mistakes.
  - jdsully 7y ago
    The problem is the further down you go the more narrow the focus. When I worked on MS Office I was always annoyed they were spending all the money on other products with few users and no revenue. After all we were the ones taking in the dollars. Of course at an organizational level it was understood they need to invest in the next big thing even if it’s not making money right now.
    - duxup 7y ago
      I don't think that really addresses "use it or lose it" type policies though.
      - jdsully 7y ago
        Use it or lose it is a blunt hammer to basically say "You get enough for subsistence but no more". Sure there are smarter ways but intelligence costs time and money too.
- wonderwonder 7y ago
  In government (usa) it absolutely still exists. As the financial period ends each department spends hugely and really wastefully to ensure their full budget is spent. Its actually quite infuriating.
  - maxxxxx 7y ago
    It’s the same in corporations.
- mr_toad 7y ago
  Budgeting is basically forecasting, and in most businesses it’s not much better than guesswork. There are ways that are arguably better, like bottom-up budgeting, but they take a lot more work, and are arguably more subjective. Internal information systems can be so poor that the best prediction of next years budget is last years budget.
peteradio 7y ago
Unless you are getting taxed >100% I never understood why you'd want to throw away money for "tax reasons". Can someone please help me understand this, it always comes up and I feel dumb for not understanding.
- umeshunni 7y ago
  You have to spend X anyway, because the money is pre-tax or non-taxable, you can spend 1.5X-2X, so the extra money is 'free'.
  - w23j 7y ago
    I'm with peteradio, I also never understand this line of reasoning. Let's say the company has earned 1,000$ and the tax rate is 50%. Your expenses X are 100$. So 1,000$ - 100$ = 900$. Of which 50% (450$) are tax and 50% (450$) are profit. Now double X to 200$: Then 1,000$ - 200$ = 800$. Of which 50% (400$) are tax and 50% (400$) are profit. That means your profit is 50$ lower (400$ instead of 450$) then if you hadn't increased your spending? Clearly my thinking is wrong somehow, but where?
    - aprdm 7y ago
      If you can "invest" the 1K into something that you don't get taxed, and, can give you some return then it is a win. I remember being mentioned that the whole reason General Electrics bought a division of Alstom was to not bring the money back to US and get taxed, let's say it was 1 billion dollars and 50% tax. Instead of getting net 500 million back to US they can keep that money abroad and invest 1 billion in another company that can net more than 500 million in the long term. Above is likely the way of thinking for those sort of occasions.
    - nightski 7y ago
      It doesn't make sense in terms of raw profit, I agree. But many expenses are paid pre-tax effectively making them cheaper than if you had paid for them with post-tax dollars.
madeofpalk 7y ago
Its stories (and personal experience) like this that make me laugh when people try and say that governments are inefficient and lacks accountability.
- antepodius 7y ago
  Big things are more likely to be inefficient and lack accountability. Governments are big, so are big corporations.
  - JabavuAdams 7y ago
    Yes, this. It's worth emphasizing whenever someone trots out the inefficient-government dogma.
  - atoav 7y ago
    Interestingly enough there is also evidence, that a government structure with much smaller parts (decentralization) is even more inefficent, and especially prone to corruption.
    - deleted 7y ago
      [deleted]
  - glennpratt 7y ago
    My experience working my way up from small companies didn't really bear this out. Budgets at my bigish company are strict and audited; having a contractor results in regular check-ins from managers to see if it can be cut off. The smallest companies I worked for were family slush funds.
- loblollyboy 7y ago
  yeah, more like any 'large organizations' without a dictator
- deleted 7y ago
  [deleted]
- 7y ago
solotronics 7y ago
Get going for a few of these simultaneously and you are set.
JakeTheAndroid 7y ago
I remember growing up and going to work with my Dad. There was like a 3 hour period where he had no work for me to do. He told me I'd only get half wages for the day (I was like 12) since the last few hours I did nothing. I felt betrayed. He empathized with me, saying 'It sometimes feels like more work to not have any work to do'. I completely agree. In my current role, there is no real roadmap or trajectory for what I should be doing or how I should report on it, etc. I have felt at times that I was just collecting a check, and that felt really scary. I expected I would love to have a job where I could kind of just do whatever I wanted on my own time table. But I have learned it's actually very stressful, and at best very boring. Luckily I got a roadmap created and prioritized, so I feel better. But it is an odd experience.
- HeWhoLurksLate 7y ago
  Better yet, at an internship, create your own roadmap (complete with a timeline, too) and, with no external validation, so it. so hard
sct202 7y ago
One of my bosses was the recipient of one of these during a corporate merger, and I think it did a lot of damage to him. He has been mostly was coasting off of his reputation from before he slacked off for 3+ years in that role. But it doesn't look like he's able to last for more than a year anywhere. I suspect that he was one of those competent-but-lazy types whose skills rusted out to to just lazy.
tomduncalf 7y ago
I was tempted to ask if you have any tips for finding such jobs ;) but actually the times when I’ve been most unfulfilled in my career have been when I’ve been bored at work. I’d much rather be working like crazy (within certain parameters), keeps things interesting! That said I do know people who’ve been paid to turn up at an office and just work on their side projects. Could probably handle that!

_bxg1 7y ago

One would think the use-it-or-lose-it problem would've been solved by now. It's so obviously dysfunctional. Is there really no better way to determine budget?

shyn3 7y ago
Some organization have this issue where you get a budget for your group, and if you don't use it then upper management will think you don't need more resources next year and will budget less or even cut from your department. If you don't use it, they reallocate it to a department that needs it and you never get it back. Another part is where if you get a hiring budget they expect you to use it because if you aren't spending it on personnel then it means you aren't hiring the best available people at that time. Non-profits usually spend out their budget. Regulated utilities can charge a % + the cost of hiring you if it is a capitalized cost, i.e. hiring a contractor to implement a project.If a contractor works 100% on a capital project it's profits especially in a low inflation economy or when the profits are not going to be as good due to forecasting issues it can pump the books. There are probably other reasons I can't think of.
- _bxg1 7y ago
  You just restated the problem in more detail. What I'm asking is, if the above system encourages managers to waste money, why hasn't anyone come up with a better system?
  - ghaff 7y ago
    In my experience, it's rarely about flagrantly wasting money for the sake of running up expenses to a budget level. Rather, it's usually more about pulling in expenses, doing something you had wanted to do anyway but didn't think you had enough money for, etc. Budgets are a pretty powerful and widely used tool for managing organizations. And there are other checks and balances. It's not like a manager can necessarily just decide to have a team off-site in Hawaii because there's room left in the budget.
    - _bxg1 7y ago
      Maybe I just put too much stock in that one episode of The Office.
  - pault 7y ago
    I think the disconnect is that you are describing it as a system, when in reality it's just a bunch of misaligned incentives and plain old human nature. It's unfixable.
    - radiator 7y ago
      It might be both of those things at the same time. This book claims so https://en.wikipedia.org/wiki/Systemantics https://en.wikipedia.org/wiki/Systemantics.
  - barbecue_sauce 7y ago
    There are systems that encourage the opposite behavior, but they tend to be damaging in other ways. It all comes down to the metrics that you are responsible for as a manager. I used to manage a grocery department at a well-regarded supermarket chain. In retail, one of the only inputs you can affect at the store level that impacts the bottom line is labor, so metrics are usually organized around labor optimization. Each week, you would be expected to exceed the previous year's Units Per Labor Hour (UPLH). This can only be accomplished two ways: increasing unit movement (which you really have no control over and is largely driven by consumer sentiment and population density) or cutting labor hours. In fact, even if volume is increasing, you can't even add hours even though labor needs scale with volume in a brick-and-mortar retail setting. To exacerbate things, the reductions in labor have already compounded yearly since the policy was put into place. They want you to squeeze water from a stone. "Well, So-and-So (who you've never met) was able to increase UPLH by 10% 5 years ago! Why can't you?" I guess my point is that systems that discourage waste often lead to insane work environments rather than cleverness or innovation, whereas encouraging waste leads to bloat and inefficiency.
sneak 7y ago
There are, of course, better ways; the thing is that non-dysfunctional methodology is not evenly distributed. This comes to mind: https://en.wikipedia.org/wiki/Recurrent_laryngeal_nerve https://en.wikipedia.org/wiki/Recurrent_laryngeal_nerve
- _bxg1 7y ago
  I don't understand the relevance of that Wikipedia article
  - LeifCarrotson 7y ago
    That nerve is a popular example of an optimization process that produced a local maximum which is highly sub-optimal. For various evolutionary reasons, a nerve routing that was direct and sensible when the aorta passed to, say, the gills of a fish, now makes a silly, circuitous route in modern mammals from the brain, down under the aorta near the heart, and back up into the neck...close to the brain. Natural selection has proven incapable of fixing this tangle. Similarly, organizational budgets that departments need to spend any way they can or suffer cuts next year seem silly. But they stem from reasonable policies, gradually changing and improving over time. Just like an organism can't sever its aorta and have a better routing of the nerve, organizations are incapable of getting from the current budget situation to a better one.
    - _bxg1 7y ago
      Thanks for the context.
    - sneak 7y ago
      Wow, that’s a great explanation, and I hadn’t even thought of it that way, myself. My take was a much simpler “just because there is a better way that exists doesn’t make it practically relevant, because entrenched tradition is usually more popular/widespread than efficiency”... but your boiling the frog idea shows even better how the mess comes about in the first place.
duxup 7y ago
I think the issue is management unwilling to trust other levels of management to make the call when they need money / a strong desire some folks have to filter / make decisions for others. I don't know what the fix is for that except to take a chance and trust folks but ... it doesn't seem to be a thing and instead they come up with easy systems to just make arbitrary decisions and there ya go. It boggles my mind sometimes that "Like if you don't trust that guy to make decisions... why is he a director here?" Sadly it filters down, I've been places where it was clear the director of my department couldn't do much at all... at that point why should I be there, it doesn't matter if he and I talk, agree, or anything then .... Steve Jobs said something about it making no sense to hire people in decision making roles and not let them make decisions. Granted, Steve was also able to hire some fine people.
- ElFitz 7y ago
  He also had some experience hiring terrible people. Practice may not make perfect, but it sure damn helps. As long as we learn from our mistakes.
- jdsully 7y ago
  The problem is the further down you go the more narrow the focus. When I worked on MS Office I was always annoyed they were spending all the money on other products with few users and no revenue. After all we were the ones taking in the dollars. Of course at an organizational level it was understood they need to invest in the next big thing even if it’s not making money right now.
  - duxup 7y ago
    I don't think that really addresses "use it or lose it" type policies though.
    - jdsully 7y ago
      Use it or lose it is a blunt hammer to basically say "You get enough for subsistence but no more". Sure there are smarter ways but intelligence costs time and money too.
wonderwonder 7y ago
In government (usa) it absolutely still exists. As the financial period ends each department spends hugely and really wastefully to ensure their full budget is spent. Its actually quite infuriating.
- maxxxxx 7y ago
  It’s the same in corporations.
mr_toad 7y ago
Budgeting is basically forecasting, and in most businesses it’s not much better than guesswork. There are ways that are arguably better, like bottom-up budgeting, but they take a lot more work, and are arguably more subjective. Internal information systems can be so poor that the best prediction of next years budget is last years budget.

peteradio 7y ago

Unless you are getting taxed >100% I never understood why you'd want to throw away money for "tax reasons". Can someone please help me understand this, it always comes up and I feel dumb for not understanding.

umeshunni 7y ago
You have to spend X anyway, because the money is pre-tax or non-taxable, you can spend 1.5X-2X, so the extra money is 'free'.
- w23j 7y ago
  I'm with peteradio, I also never understand this line of reasoning. Let's say the company has earned 1,000$ and the tax rate is 50%. Your expenses X are 100$. So 1,000$ - 100$ = 900$. Of which 50% (450$) are tax and 50% (450$) are profit. Now double X to 200$: Then 1,000$ - 200$ = 800$. Of which 50% (400$) are tax and 50% (400$) are profit. That means your profit is 50$ lower (400$ instead of 450$) then if you hadn't increased your spending? Clearly my thinking is wrong somehow, but where?
  - aprdm 7y ago
    If you can "invest" the 1K into something that you don't get taxed, and, can give you some return then it is a win. I remember being mentioned that the whole reason General Electrics bought a division of Alstom was to not bring the money back to US and get taxed, let's say it was 1 billion dollars and 50% tax. Instead of getting net 500 million back to US they can keep that money abroad and invest 1 billion in another company that can net more than 500 million in the long term. Above is likely the way of thinking for those sort of occasions.
  - nightski 7y ago
    It doesn't make sense in terms of raw profit, I agree. But many expenses are paid pre-tax effectively making them cheaper than if you had paid for them with post-tax dollars.

madeofpalk 7y ago

Its stories (and personal experience) like this that make me laugh when people try and say that governments are inefficient and lacks accountability.

antepodius 7y ago
Big things are more likely to be inefficient and lack accountability. Governments are big, so are big corporations.
- JabavuAdams 7y ago
  Yes, this. It's worth emphasizing whenever someone trots out the inefficient-government dogma.
- atoav 7y ago
  Interestingly enough there is also evidence, that a government structure with much smaller parts (decentralization) is even more inefficent, and especially prone to corruption.
  - deleted 7y ago
    [deleted]
- glennpratt 7y ago
  My experience working my way up from small companies didn't really bear this out. Budgets at my bigish company are strict and audited; having a contractor results in regular check-ins from managers to see if it can be cut off. The smallest companies I worked for were family slush funds.
loblollyboy 7y ago
yeah, more like any 'large organizations' without a dictator
deleted 7y ago
[deleted]
7y ago

solotronics 7y ago

Get going for a few of these simultaneously and you are set.

JakeTheAndroid 7y ago

I remember growing up and going to work with my Dad. There was like a 3 hour period where he had no work for me to do. He told me I'd only get half wages for the day (I was like 12) since the last few hours I did nothing. I felt betrayed. He empathized with me, saying 'It sometimes feels like more work to not have any work to do'. I completely agree. In my current role, there is no real roadmap or trajectory for what I should be doing or how I should report on it, etc. I have felt at times that I was just collecting a check, and that felt really scary. I expected I would love to have a job where I could kind of just do whatever I wanted on my own time table. But I have learned it's actually very stressful, and at best very boring. Luckily I got a roadmap created and prioritized, so I feel better. But it is an odd experience.

HeWhoLurksLate 7y ago
Better yet, at an internship, create your own roadmap (complete with a timeline, too) and, with no external validation, so it. so hard

sct202 7y ago

One of my bosses was the recipient of one of these during a corporate merger, and I think it did a lot of damage to him. He has been mostly was coasting off of his reputation from before he slacked off for 3+ years in that role. But it doesn't look like he's able to last for more than a year anywhere. I suspect that he was one of those competent-but-lazy types whose skills rusted out to to just lazy.

tomduncalf 7y ago

I was tempted to ask if you have any tips for finding such jobs ;) but actually the times when I’ve been most unfulfilled in my career have been when I’ve been bored at work. I’d much rather be working like crazy (within certain parameters), keeps things interesting! That said I do know people who’ve been paid to turn up at an office and just work on their side projects. Could probably handle that!