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Marketplace

New ways to cut wasteful spending at the Pentagon

Nancy Marshall-Genzer May 13, 2013
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The federal budget cuts known as sequestration are taking about $13 billion out of the Air Force’s budget for this fiscal year, so, the Air Force brass at the Pentagon are scrounging around for extra change, asking rank and file airmen for money-saving ideas.

The Air Force calls its new cost-cutting initiative “Every Dollar Counts.” It’s designed to be easy and direct. Ideas can be submitted through smart phones. The best ones make their way to General Larry Spencer, who has already implemented some of the suggestions — like this one from an Air Force officer who slashed the Pentagon’s phone bill.    

“He found over a thousand phone lines that were plugged in that we were paying for, that no one was using,” General Spencer says.

The phones were unplugged, saving more than $300,000. This kind of cost cutting may be new at the Pentagon, but Wendy Werner does it all time. She’s president of Carpet Town, a flooring business just outside Milwaukee. Werner first turned to her 23 workers for cost-cutting ideas in 2008, when the housing crisis was battering sales. Werner got some good suggestions. She used to have professional cleaners in twice a week, but one employee said, cut that down to once a week, and let them clean up.

“We took turns,” she says. “We had a chart made up and everyone would trade off a position of what they were cleaning — including me — and we cut our cleaning costs in half.”

That measure saved more than $600 a month. Werner saved another $2,500 after an employee suggested energy-efficient light bulbs. But she says there’s another benefit– her workers are now more engaged.

“The best way to say it is, they care,” she explains. “You know, they took on the responsibility of getting through these more difficult times, together.”

Management consultant John Bernard says Werner is onto something. Of course, sometimes you get half-baked suggestions from workers. But Bernard says you can cut down on that by letting them try out their ideas, before bringing them to management.

“You flip it upside down and you say, no, the ideas are yours,” he says. “You go implement them.”

Bernard says that might be hard for the Air Force, with its top-down culture of following orders.  But General Spencer told me he’s ready to try anything — even loosening up the chain of command.

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