Four By Forty

A friend of mine was telling me a story long ago – before the debacle and financial mess of Wall Street. His son had just graduated from one of the Ivy League schools and was interviewing for jobs with the best of the Wall Street financial firms. He wanted money to buy a suit.

My friend, a frugal engineer from the old school, used to donning his old off-the-rack J.C. Penney suit and having lived a life devoted to polyester, gave him $150 for the suit. He was taken aback when his son wanted $600! The usual father-son argument on extravagance, need for thrift and senseless purchases ensued but the outcome was unusual. My friend handed his son the money he wanted with a pat on his back and a wish for good luck.

Intrigued I asked him how his son won the argument. He replied, “My son told me that if I wanted him to apply to a used car dealer ship as a floor salesman, he would be more than happy to buy an off the rack polyester suit at J.C.Penneys.” But… seeing that he was applying to a Goldman Sachs and a Lehman Brothers, his need was not so much, buying a suit, as making a strategic investment that would land him a job that guaranteed a six-figure income. And a 600 dollar suit may just tip the balance…

I am an engineer with an engineer’s sense of frugality and utility. Having spent life in three different start-ups I know that the money we make is hard-won and not easily wasted on life’s “fripperies”. My first Honda Accord was a DX model – a base model that has “4X40” air conditioning – 4 windows down and 40 miles an hour! But over the years I slowly added on item after item until it became obvious that had I bought the higher end EX in the first place, I would have saved real money. I had the money then and could have easily bought the higher end model in the very beginning, but my sense of frugality and deep sense of virtue in saving a penny and denying myself “useless” luxuries came in the way of making a hard headed investment decision.

In a world of entrepreneurship and frugal enterprises, we must be careful and mind what my father always tried to teach us, “Knowing how to spend is as important as knowing how to save.”

Knowing the difference between heedless cost and sensible investment is not easy. When the CFO is harping on cost management it is difficult to take those financial risks that may pay off handsomely. But a gamble is a gamble and good gamblers win more than they lose. Enterprise architecture forces us to think of cost control as much as putting a face on that risky gamble.