Price, Cost, Value

At the time of the Columbia shuttle disaster over East Texas (2/1/03), I was working in the car rental industry and was involved in providing vehicles for the many response teams involved in the recovery effort. Of the 200+ vehicles rented, one was a 15 passenger van from my inventory. During its several months out, the rear seat was removed by the folks using it and in the confusion of such a massive effort never seen again. Upon its return without the seat, we were informed after diligent search among the many places and teams involved there was no sign of it. Ironic for a search and recovery team to be unable to find something they had lost.

We promptly obtained quotes for the replacement of the seat from a dealership. A new replacement seat is not an item that can be purchased whole, it must be ordered in so many parts (250+ as I recall) and be assembled. The cost of the parts was about $2,000 and labor was as much. So the federal taxpayer was billed this amount in the master invoicing which was apparently paid without a second thought. This provided maximum benefit to the company and ease for the customer. (Taxpayer/Government $4,000 loss/Company no loss, $4,000 gain)

The van, without the seat, was promptly sold in a car auction, 'as is'. The winning bid was slightly less than the potential wholesale cost of the van, because of the missing seat. My inventory was charged with the lost value and credited an equal amount out of the amount paid by the government, the balance of what was originally paid for replacement was credited somewhere else (never got a straight answer from the bosses). There was never a second thought of actually replacing the seat, that would have taken too much effort. This provided the least cost and greatest ease for the company. (Company loss charged to my cost center $2,000 for perceived difference to wholesale value, Company credit to company cost center for payment, $4,000 - net gain to company cost center now really $6,000) 

I later found out that the used car dealer who purchased the vehicle promptly went to a junk yard, paid $150 for a replacement seat and sold the vehicle for a gain more than the amount originally paid by the government for the replacement of the seat. This provided maximum profit for the dealer with the most effective use of his effort. (Dealer gain for effort and smarts +$4,000)

I have found a carryover from this experience - 

* when dealing with a problem for someone else, to our own benefit, we will tend to choose the most expensive option that is easiest for them to go along with,

* when dealing with a problem for ourselves, to our own benefit, we will tend to choose the least costly option that is easiest for us to go along with,

* when choosing to actually solve the problem a true entrepreneur will find the option that provides the maximum benefit with the least required amount of work / investment. Cost / Expense is translated into value added and ease is forgotten to become efficiency in effort to maximize overall gain.

Now extend this thought to personal relationships:

* when dealing with the ''problems" of others, we are most likely to charge them the full cost of their mistakes / failures / shortcomings and provide them the means of appeasing us that seems easiest to them (least price) but pays us the most,

* when dealing with our own "problems", we generally avoid them by considering them too costly to deal with and find the easiest means to pass over them or pass them on to someone who will deal with them at little or no cost to us,

* a person committed to development (personal and relational) will take all "problems" as they come, head on. They will properly consider and then pay the appropriate cost at the lowest price~ investing efficiently the time and resources needed to reap the full value.