Many organizations talk about “frugality” as one of their core values. It is one of Amazon’s famous leadership principles. It is a handy value to have – not just in corporate but also in life. It might come easy (not generalising here) to a person with a typical Indian middle class “mindset” (note that I don’t say middle class “background” because people’s mindset is not the same as the background they come from).

Recently, there were a few discussions at my office around this term which got me thinking – what really is frugality? How does one go about being “frugal” in a corporate setting? 

There is one aspect of frugality that is not spoken about much. That’s what I’ll address in this blog and I’ll bank on my learnings over the last 10 years in corporate life.

Cool, so back to the definition. Frugality refers to the careful management of resources – whether it is money, effort or food. There is an emphasis on “saving” and achieving more with less. The Indian “jugaad” mindset lends itself to frugality where you try to be resourceful with whatever you have.

This generally leads people to move towards being conservative. We’re frugal – so we don’t spend money. We’re happy with what we have. We go for options that are cheaper to save money.

This brings forward a legitimate risk. A risk of stagnation, of foregoing growth and learning. You may be doing great with the existing resources but are you really maximising your potential? Are you compromising quality? A question worth pondering over.

So, how do you break out of this risk? Cut to 2015 – I had just joined a brand whose name I hadn’t heard of before, Sephora (yes, the multinational speciality beauty retailer). I was the third person to join the team and was working directly with the CEO. My job was business planning and analytics – I was supposed to be the numbers guy. I assumed there would be a lot more people joining in different departments. After a couple of weeks, I realised that it was going to be just 4-5 of us in the corporate team and the rest were in retail. This was my CEO’s way of being frugal – do not grow the size of the team first, let the business demand the manpower once it scales.

It was a lot to take in. I had zero experience in the beauty industry, hardly any corporate experience. I definitely did not have the technical knowledge required to put this frugality into practice. My colleague in category management had a wealth of knowledge about this category and business levers. That was all we had and I felt it was impossible to run a team with such few people. This couldn’t be frugality – it was being cheap.

I was naive at the time and I couldn’t see one major factor that would come into play. LEARNING. Everyone in the small team was hungry to learn and make a difference. Each of us figured out a way to play multiple roles without burning ourselves out. And within 7-8 months, we had come up with our own innovative systems and set up all the business functions like supply chain, buying, inventory planning and marketing. It took an entire 2 years before we brought in one set of assistant managers to take over the daily operations. 

That experience really opened up my eyes. We see plenty of examples of companies throwing money and people at problems. It may not always work. And almost always, it is not a sustainable strategy. The answer in most situations is upskilling.

Let’s break this down a bit more to make it actionable to you – the reader!

If you’re a company or individual trying to achieve frugality, ask yourself the question – are you continuously focusing on learning new skills? As you keep learning, two things will happen:

• You will figure out quicker ways to do the same tasks. Result = time saved!
• You will also start thinking from a larger context and prioritise better. Result = time and money is spent on higher RoI tasks.

Next question that you need to ask is this – what do I need to learn to be able to 2x my output? Is it something technical? Is it the mastery of some tools? It could even be getting more comfortable with Excel! Or learning people management – managing them upwards, sideways and downwards in the hierarchy. Getting this answer will help you move faster without ambiguity.

Here’s an example. We had over 5000 SKUs at Sephora and we needed to figure out the ideal weekly stock allocation from our main warehouse to the stores. It worked out fine when we had 4 stores – it could be done manually on an Excel sheet. As the store count increased, it became more complex and the chance of errors went up. There were multiple files to bring together for each SKU – one wrong filter or copy paste error would throw the entire thing off – 3-4 hours of total effort wasted. 

After doing this for a couple of months, I realised that if this logic could be automated, the errors would be reduced to zero. And I started learning VBA Macros for Excel. With a couple of weeks of effort, I created templates that could fetch all the required input files, compute the stock allocation and generate the STO files which had to be uploaded on SAP. No more copy paste errors. No more filter errors. It was essentially the job of a full time executive that was handled by the code. All done in less than 30 minutes!

The best part was that it needed only one minor tweak to accommodate new SKUs and new stores. The format worked beautifully for the next 5-6 years. Frugality achieved! The best part was that we could use the free time to think about improving the assortment, focus on other processes etc.

Here’s another quick example outside of work. Frugality is when you constantly upskill, get a better job with a higher salary while not constantly upgrading your lifestyle. If your rate of spending money stays constant while your earning grows, that is another form of frugality. I’m sure I’ll get a lot of contenders on this point – always up for a debate in the comments section! 🙂

So, the next time you hear the term frugality, think about what skills need to be learned to achieve it!

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