Every Check has a Cost

This is an old post that I drafted but never published.  Some recent events/experiences reminded me of this post, so I thought I should finally publish.

Paul Graham, of Y Combinator wrote an essay “The Other Half of “Artists Ship” is great at reminding us about hidden or soft costs and their negative impact to many large organizations. TechCrunch wrote a related article as well entitled “The Cost of Prudence”.

“Whenever someone in an organization proposes to add a new check, they should have to explain not just the benefit but the cost. No matter how bad a job they did of analyzing it, this meta-check would at least remind everyone there had to be a cost, and send them looking for it.”

The essay is a good reminder that everything has a cost be it a clear fixed cost, operational cost or an opportunity cost. Our Leaders and/or Managers are usually merely trading-off these costs when they put in place new processes or governance. The problem as mentioned in the essay is the trade-off being made can often have clear costs but the hidden costs or soft costs can often produce a net negative impact as well…