A Couple Dollars Just Isn’t Worth It

“Oh, they better not mess with me or I become their worst nightmare,” said my barber, his eyes glowing with intensity. “Our cable went out a few months ago and they promised me a credit within a couple of billing cycles. Well, I watched those bills like a hawk and, when I didn’t see the credit, I called and laced into them.”

As his anger rose, I started to become concerned about the sharp blades flying around my head. At least, I thought, I don’t owe him any money. I would tip well.

After he finished and I was out of harm’s way, I thought about how silly it was that someone would spend so much time and energy worrying about a few dollars. I reflected on a great scene from “A Bronx Tale,” in which Chazz Palminteri, playing an older, wiser gangster, councils his would-be protégée on how to handle a collection issue.

“This Louie Dumps owes me $20 dollars. It’s been two weeks, and whenever he sees me he keeps dodging me. He’s becoming a pain in the ass. Should I crack him one?”

“What’s the matter? What have I been telling you? Sometimes hurting somebody ain’t the answer. Is he a good friend of yours?”

“No, I don’t even like him.”

“There’s your answer right there. It costs you $20 dollars to get rid of him. He’s never gonna bother you again. He’s never gonna ask you for money again. He’s out of your life for $20 dollars. You got off cheap.”

A few weeks later I was talking with a friend who does finance and accounting for a very large company. We were chatting about how an issue around a relatively insignificant dollar amount had taken up almost all of my morning and caused me quite a bit of stress.

“I can’t believe they are making such an issue over such a small amount,” he said. “It doesn’t make any sense. It can’t be material to their budget,” he said.

“What do you mean by material?’’ I asked.

“It’s an accounting term that’s used in auditing. It gives the auditor a framework to decide if an irregularity he finds is worth making an issue out of,” he said.

“Interesting,” I said.

“Let me give you an example. Finance is centralized in our organization, and we support different departments. I’ve got people I personally support that have budgets of more than $300 million. Occasionally, I’ll get a request from a senior manager, someone who should know better, to help him research a discrepancy of a few thousand dollars. This is someone who clearly doesn’t understand the concept of materiality. I tell him to have his admin look into it because that’s not something I’m going to spend my time on.”

And therein lies the brilliance of applying the materiality test to everything we do, and don’t do. And I think it’s largely how well we apply this test that separates great leaders from those of average effectiveness. For it is only by ignoring that which does not matter that we can save our energies for that which does. And it is only by the complete application of all the energies at our disposal — as individuals, departments, and organizations — to a coherent and relentlessly pursued goal that we can best the competition and break away from the pack. More than anything, it’s fragmented goals, unclear objectives, and work that occurs in fits and starts that relegates an enterprise to mediocrity.

Hapless organizations bear the common hallmark of hapless management that just doesn’t seem to know what it wants. Avoid this problem by defining your organization or department’s raison d’être, then only pursuing those activities that are material to it. Learn this lesson today and, no matter what mistakes you’ve made in the past, you’ll be getting off cheap.