Friday, October 9, 2009

How to stop the wastage Slowly but surely

We waste a lot starting from food, energy, water and other resources. Why do we do that? Are we fundamentally bad and don't care about our earth and limited natural resources? I think it this is not always a good or bad problem, it is a problem of accountability.

Most of the wastages are done when we are not accountable for those. For example consider wasting food in a office party(company pays it) or wasting water in our bathroom(we pay a fixed price for water and utilities and don't care how much we spend the water or how much garbage we generate).

Now consider the scenarios where we care. We care to drive in the right way(because if we get a ticket, our insurance premiums will increase) or when we buy food for ourselves in restaurant we buy within our capacity or at least pack it for next day.

It may sound simplistic, but I think the best way to solve the wastage problem is to make user accountable. We need to eliminate any free lunch. Let me discuss my idea with few examples.

We need to introduce pay per use pricing and remove any fixed pricing(at least some mixed model where variable component is present with a minimum fixed price). Let me start with water, utilities and garbage collection. Instead of a fixed monthly price let's meter the usage and price per the usage. Similarly let's consider healthcare cost. Our insurance covered model allows us to waste money in unnecessary tests etc. We should reduce the insurance premium and increase the co-payment or co-insurance. That way we can ensure accountability. Also we should have a guarantee program where the providers will provide guarantee of any treatment done from their facility. That way they will also make sure unnecessary costs are not involved and proper care is taken during the treatment.

We have huge business wastage. This is simply because nobody cares when the money involved is not personal money. I propose to introduce personal responsibility in corporate resource usage. The accountability should be at the most granular level and any cost save will have direct connection to that person's remuneration. This is a delicate balance but this will work.

Ownership of any transaction and personal accountability are the key here...

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