I’ve got a number of friends who work for big corporates (consulting firms, major retailers, banks, big 4, etc.) and many of them didn’t have holiday parties this year. Ya, ya, I know, the economy and all that. Hey, at dynamIt we bootstrapped. I’m very aware of costs and we’re doing our own hunkering-down considering the climate, but the LAST thing I’m cutting is a holiday dinner, or any company culture/motivation pieces for that matter.

Now, more than ever, people (clients/customers) are looking for value Value VALUE. Your people are the ones creating and delivering it. Yes, I’m sure they are happy they still have a job, considering the alternative, and that immediately makes/keeps them happy and doing their best every day, right? Cmon.

My point: Everything has a cost. Know the difference between a spend and a spendvestment. Keep your people happy and motivated. Invest in them, their morale, their personal interests and development. Invest in your culture (read: have holiday parties); find other fat to trim and save. Spending money on the pieces of your machine that have the ability to make a difference and be dynamic in a time when clients are looking for PODs beyond lavish conference rooms and peripheral fluff is a smart play. Something like a holiday party shows that you care about your people outside of their cubicles and their deliverables. It shows that you’re interested in their social needs and allows you to say Thank You. Plus, it’s probably tradition. Start cutting traditions and people start losing core organizational characteristics to root themselves in.

[Pics from dynamIt Holiday Dinner and also our Advisory Board Dinner will be up in the first week of the new year. Ya, that's right, we're spending on people who create value. We've found tremendous returns so far...]

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11.18.2009 UPDATE

Great piece on extrinsic versus intrinsic motivators which I consider relevant:

Nick,

This makes a lot of sense. While bootstrapping and cutting costs is always essential and smart, especially now, things that boost morale and rally the troops just should not be touched.

Is a dinner or party a good amount of money to spend? Yes. But I can guarentee you that the money spent will be made up, in time, through increased productivity, excitement, and overall morale for all those involved.

It does seem that spending in this situation is exactly what you have mentioned, a “Spendvestment.” Maybe instead of cutting costs period, firms should be looking to shift most costs to “Spendvestments.” It makes sense.

Well put. Your spendvestment includes and honors those who are ‘in the foxhole’ and weaving the fiber of your organization. Good looking out for your people, your companies most valuable asset.

Danny and Michael,

I had a conversation with a friend who is a developer last night. He has some friends who work in IT for a global bank. They’ve had a hell of a year, revamping some of their major systems and have just been slammed. They were looking forward to a big holiday party and bonuses this year as their delivery was highly praised by higher ups.

Needless to say, their party was canceled, bonuses slimmed significantly and instead of the party, they had a hour long video conference/training call.

I suspect this development group won’t be so motivated in the new year to deliver above and beyond. All it would have taken was 1 night and a spendvestment on their lives outside of scripting to reload for what promises to be a tougher year ahead.

Well said, Nick. All too often companies ignore the investment in company culture. It’s one of those things you can’t put a finger on but clearly pays back. You can’t put a price on loyalty or happy employees… or discretionary effort. But you don’t get those things unless you make the effort.

Brian,

I agree, company culture is a) often overlooked/ not valued highly enough and b) often the first thing to get hit when belts are tightening. There is, of course, the chance that spends on “culture” become exorbitant and you encounter a point of diminishing return to make it a “cool place to work”, but experiential spends these days, as far as I’ve seen, have returned high yields.