Fixed vs Variable Cost... Your Cubicle is at Stake.

“Everything simple is untrue, everything complex is useless.”

Paul Valery, French philosopher-poet

This automation and AI, artificial intelligence, thing.


It will never eliminate the corner office job, but if you have been paying attention you have noticed that middle management positions have been disappearing for years. A good mid-manager is looking for golden opportunities to pinch pennies, and a tighter structure with less people doing more work for the same or lesser pay is always the best route to take.


But pinching pennies taken too far alienates the cream of the crop who want to be loyal, who want to see a grand enterprise or project through to completion. Meaningful lives matter.


To get to the basics, there are two types of “people” costs: fixed and variable. The fixed people cost is the mid-management person in between the variable costs and the corner office. Cutting the fixed people cost, if it can last for a generation and not just a quarter, is the long range goal of every business.


The variable people cost is the hour to hour wage, with a plus or minus for production, that must be endured. Usually the variable cost is treated as a target rich environment, but these are the people doing the actual work, so there will always be a variable hourly-type wage paid. It follows that the only variable becomes productivity, or automation. It’s the future, which has been with us since the 19th century. We need to get used to it.


Any company’s long term goal is to cut all the cubicles leading to the last cubicle on the left, all that redundant fixed cost. Once those ladder rungs are cut, your promotion from level one to level two is now one hundred to one, instead of ten to one.


Your professional goal is to make your job valuable and essential to the company’s mission.


Productivity is now your ability to take on more assignments for the same general wage. If it’s meaningful, all the better. It’s not the busy person who complains, I’ve found. It’s the person who has the time to be disgruntled. Again, meaningful lives matter.


AI will become the tech workers of the future. When that scales, as it inevitably will, tech worker layoffs will spur the next great depression. AI, and the military, will rule the world, and that is not a sci fi notion.


If I had to do it all over again, I would have encouraged my own kids to learn a real trade, whether carpentry, plumbing, electrical work, whatever.


The last cubicle on the left looks better all the time, even as that corner office gets farther and farther away.

3 views0 comments

Recent Posts

See All

(c) 2019 Kevin Horgan, www.corps2corporate.com

  • Grey Twitter Icon

FROM THE CORPS TO CORPORATE and Points in Between... is a series of personal musings using the Leadership Principles and Qualities of the USMC, through my eyes and experiences.  I had a wide variety of successes and failures both large and small, and perhaps you will see yourself or others in the opinions herein.

I am a retired UPSer, having spent a fast 33 years with the organization.  I served in management positions in engineering, operations, and as an attorney in real estate.  I started law school

and loading trucks for Big Brown on the same day in 1984.

Before UPS, I served as an infantry officer in the Marine Corps.

That experience was the great privilege of my life.

I was nothing special:  I deployed, but was never shot at!

I have written two historical novels on the Civil War, THE MARCH OF THE 18TH, and THE MARCH OF THE ORPHANS.

(See www.kevinhorganbooks.com).

 

I have a political blog using a fictional character that spanned from January to August 2019. (See www.ourcultureinchoate.com) 

If you like this work, please share.  Your comments are always welcome!