The Cost of Doing Business

The class that had the greatest impact on me during graduate school was actually an out-of-major elective in the chemical engineering department and was—interestingly—co-listed with the business school. The course introduced the concepts of life cycle analysis of a product and how the data resulting from that analysis affects business decisions. At the time, I was a 23-year old design engineer at Ford Motor Company, while many of my peers were full-time students who stayed in school after graduating rather than working in between. 

During one class exercise, we threw different criteria that may be used to influence a decision onto a white board. The room was quickly divided into two camps: those with industry experience and those without. “Cost and timing,” said all of us cynical worker bees. “Effect on the unemployment rate” and “eutrophication into the watershed” said the idealistic students. How cute, my Ford colleagues and I thought, these optimistic young folks think that anything else matters. My professor, who consulted regularly for the water treatment industry, begrudgingly agreed.

Now, nearly a decade later, the edict of “cost and timing above all” is slowly eroding. Companies like Patagonia—which already has environmental responsibility baked into its brand identity—implores you to buy less stuff. Tech start-ups like Full Contact encourage employees to take time away from work with their paid-paid vacation policy, in which employees receive not only their regular salary while on vacation, but additional money that can only be used for the vacation. It is clear that being (or at least striving to be) a soulless, money-grubbing corporation is out-of-fashion. Companies big and especially small are jumping on the bandwagon to have happy, healthy employees and invest in a sustainable future in which more is valued than just the bottom line. 

While I applaud this fundamental shift, I feel we still have a long way to go to embrace factors that (gasp) may negatively affect shareholder value into our business decisions.

As I reflected on the year that has passed, I wondered how I would stack up against the ideals of my optimistic classmates. I run a business unit of a large company, with my focus being energy storage devices like lithium-ion batteries. Generally speaking, I love my job. My boss and the people who work for me are absolute gems and enrich my life on a daily basis. My work is challenging and satisfying and not a day goes by when I do not learn something new. An engineer at my core, however, I cannot resist the urge to quantify and examine the data of my year.

  • In 2015, I flew nearly 60,000 miles on 59 flights. Three of my trips were personal, but all either started or ended in a location dictated by work. I know there are loads of people who travel more than that, but—in contrast—my husband went on two round trips this year. 

    • This equates to 3.2 million pounds of CO2 or the planting of 66,250 trees in a single year.

  • I went to metro-Chicago fifteen times and spent 41 days there. 

    • I had time to go into Chicago—home of endless top notch restaurants, world-class museums and so much more—only three times. 

  • I went to the park 2.8 miles from my house nine times. I love that park. What on earth was I doing instead?

  • I skied 21 days. I wish more of them had been mid-week powder days, but this is hardly anything to complain about. One of these days was a team-building day in which everyone in my office ran off to the mountains together. Again, no complaints.

  • My employees also traveled quite a bit to set up our manufacturing line outside Chicago. I am proud to be building our product in America, but not proud that my employees collectively spent more than six months away from their family and friends. 

  • In an effort to boost sales, we deployed a mobile showroom, i.e., an 18-wheeler with a bunch of trade show-quality displays inside. The truck travelled 8,900 miles in 2015 for eight stops, each stop accompanied by at least four people, all of whom travelled from out-of-town. This works out to about $2,250 in fuel, $4,300 in travel expenses per stop ($34,400 total), plus the expense of designing, outfitting and maintaining the truck (the stairs to get into the truck were around $10k alone). This does not take into account the lost time of each employee, who struggles to be productive while bouncing from airport to truck to hotel. Obviously, an influx of sales gained through this type of outreach would more than offset the monetary cost, but cannot offset the intangibles like stress level and increased overtime (the work day does not begin until you get back to the hotel).

  • Of the three weeks vacation available to me, I managed to take one. Those days mostly composed of family coming to see me and forcing me to spend time away from the office.

  • I was able to ride to work at least two days per week, assuming I wasn’t taking a plane to work. Having a shower at work and a relatively informal office makes this possible and I am thankful for this.

Overall, we did some things well and some things not so well. Our company culture of face-to-face meetings, while great in many ways, fails to take into account the hidden costs of dragging people from around the world together (I had two engineers fly to Chicago from Germany for a 45-minute meeting.) While we use tools like Slack, WebEx, and Skype, we do not use them to their full potential. We are also quick to assume that we, as individuals, are integral to progress. “It won’t get done correctly or at all if I am not there” may be the reality with particular skill sets, but should not be the de facto assumption. 

At the end of the day, all cliche intended, my company will not be in business without profit. Perhaps the more interesting analysis would be the cost-benefit analysis of improving upon our results from last year. For example, if we instilled a culture that valued Skype and FaceTime, could we cut down on the time employees spend in the air and increase the time they spend in local parks and with their kids? I think this is a noble pursuit for next year.