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VIDEO TRANSCRIPT

© University of Phoenix 2010 Cost Savings Page 1

Small measures of efficiency are the foundations upon which successful businesses prosper. But cost

control can easily be forgotten – especially if those at the top don’t perpetuate the message.

ID: 50V101229000121486 Cost Savings

SOURCE

2004-2010, 50 Lessons Ltd.

CATEGORY

Business and Economics

SUB-CATEGORY

Finance

SPEAKER

Sir Christopher Bland

SPEAKER TITLE

Former Chairman

ORGANIZATION

BT Group

TAGS

Consumer Products, Retail &

Wholesale

My first job was as the assistant advertising manager of Currys. Currys then sold bicycles,

white goods, washing machines, fridges, radios and television sets. I was based in the

head office in Uxbridge Road. I was the assistant advertising manager and edited the

house magazine. I learnt a lesson when I was working in a shop in Bedford.

There was a cleaning lady who was in charge of cleaning the shop after the place was

closed down and the customers had all gone. I saw her opening a new tin of Ajax scouring

powder. On the top of those Ajax tins are half a dozen holes through which you shake the

powder to clean the surface. She very carefully ripped off the piece of stuff that covers

these five holes, and was carefully Sellotaping back over all the holes but one. I asked her:

“What are you doing?” She answered: “You waste an awful lot of powder if you leave all

the holes open.” I thought this was pretty odd behavior, but I did learn that economy in very

small things mounts up.

I don’t think, in BT, it’s going to make a huge difference if we Sellotape over the Ajax holes,

but you do have to scale up your attention to costs in an organization that size through

watching all items of expenditure, and questioning whether certain things are really

necessary. When times are hard, the things that are nice to do can’t be done.

I have a golden rule; when I arrived, the company owed the banks £30 billion. Try writing

that out on a piece of paper and find out how far east the zeros go. I made it a golden rule

that if anybody - and two or three people tried it on me early on in my time there - said: “It’s

only,” followed by a six or seven-figure number, the conversation would end there. As in:

“It’s only a million,” or “It’s only £500,000.” Once you start thinking “It’s only £500,000,” then

you know cost control is completely out of hand. Don’t think that just because you’re a £17,

18 billion turnover company that those kinds of numbers don’t matter.

I think you have to set an example. I don’t wear a hair shirt, but I don’t have helicopters or

private planes. I take a fairly dim view of what I regard as excessive or unwarranted

expenditure, whether it’s on me or anybody else. I was quite shocked when I visited the

headquarters of what shall be a nameless American telecoms company. I discovered that

they had a fleet of three or four jets, and three helicopters. That kind of extravagance at the

highest level is unjustified on its own account, although it may make you feel very cheerful

and rich if you’re the person who travels around in them.

It’s contagious. If people know that the Chairman is getting a helicopter to go home, or

getting a private plane to go to France when he could perfectly well catch the train or go on

a scheduled flight, then why should they pay attention to cost control?

It’s always been my view that great businesses are not built on heavily carpeted offices and

large cars, particularly at the beginning. Towards the end you may be able to afford them,

but you certainly can’t at the beginning. Great businesses are built by men who switch off

the lights when everyone leaves the office - and by ladies who Sellotape over the holes in

the Ajax can.

VIDEO TRANSCRIPT

© University of Phoenix 2010 Cost Savings Page 1

Small measures of efficiency are the foundations upon which successful businesses prosper. But cost

control can easily be forgotten – especially if those at the top don’t perpetuate the message.

ID: 50V101229000121486 Cost Savings

SOURCE

2004-2010, 50 Lessons Ltd.

CATEGORY

Business and Economics

SUB-CATEGORY

Finance

SPEAKER

Sir Christopher Bland

SPEAKER TITLE

Former Chairman

ORGANIZATION

BT Group

TAGS

Consumer Products, Retail &

Wholesale

My first job was as the assistant advertising manager of Currys. Currys then sold bicycles,

white goods, washing machines, fridges, radios and television sets. I was based in the

head office in Uxbridge Road. I was the assistant advertising manager and edited the

house magazine. I learnt a lesson when I was working in a shop in Bedford.

There was a cleaning lady who was in charge of cleaning the shop after the place was

closed down and the customers had all gone. I saw her opening a new tin of Ajax scouring

powder. On the top of those Ajax tins are half a dozen holes through which you shake the

powder to clean the surface. She very carefully ripped off the piece of stuff that covers

these five holes, and was carefully Sellotaping back over all the holes but one. I asked her:

“What are you doing?” She answered: “You waste an awful lot of powder if you leave all

the holes open.” I thought this was pretty odd behavior, but I did learn that economy in very

small things mounts up.

I don’t think, in BT, it’s going to make a huge difference if we Sellotape over the Ajax holes,

but you do have to scale up your attention to costs in an organization that size through

watching all items of expenditure, and questioning whether certain things are really

necessary. When times are hard, the things that are nice to do can’t be done.

I have a golden rule; when I arrived, the company owed the banks £30 billion. Try writing

that out on a piece of paper and find out how far east the zeros go. I made it a golden rule

that if anybody - and two or three people tried it on me early on in my time there - said: “It’s

only,” followed by a six or seven-figure number, the conversation would end there. As in:

“It’s only a million,” or “It’s only £500,000.” Once you start thinking “It’s only £500,000,” then

you know cost control is completely out of hand. Don’t think that just because you’re a £17,

18 billion turnover company that those kinds of numbers don’t matter.

I think you have to set an example. I don’t wear a hair shirt, but I don’t have helicopters or

private planes. I take a fairly dim view of what I regard as excessive or unwarranted

expenditure, whether it’s on me or anybody else. I was quite shocked when I visited the

headquarters of what shall be a nameless American telecoms company. I discovered that

they had a fleet of three or four jets, and three helicopters. That kind of extravagance at the

highest level is unjustified on its own account, although it may make you feel very cheerful

and rich if you’re the person who travels around in them.

It’s contagious. If people know that the Chairman is getting a helicopter to go home, or

getting a private plane to go to France when he could perfectly well catch the train or go on

a scheduled flight, then why should they pay attention to cost control?

It’s always been my view that great businesses are not built on heavily carpeted offices and

large cars, particularly at the beginning. Towards the end you may be able to afford them,

but you certainly can’t at the beginning. Great businesses are built by men who switch off

the lights when everyone leaves the office - and by ladies who Sellotape over the holes in

the Ajax can.