In the series “Money Bear Club Answers”, Money Bear Club will publish the best answers from its Quora profile. The answers will range widely from business and investing, to budgeting and the philosophy of the everyday life. Read on to find out more unconventional perspectives and solutions!
Originally answered: December 6th, 2018.
What are some tiny changes that companies could make to save a lot of money? Do you know which companies made changes to save money? How much did it save them?
Airlines are probably the best example. One of the most well-known examples is the story about one olive.
Do you like olives in your salads? I personally don’t, and most salads do not have them in their recipes.
Olives are mostly used as arbitrary garnishes. For some, an olive in a salad, is more of a decoration than a food item.
What it has to do with tiny changes and big companies?
Well, American Airlines, as any other company in a competitive sector, was looking to cut costs.
An airline has many venues to cut costs: seating, service, airport services, etc. But they all require significant changes. These significant changes may also be hard to implement.
Consider changing sitting arrangements: plane seats costs a lot. Taking even one plane out of operation will cost a company thousands, or even millions of dollars in lost revenue.
So what did American Airlines do?
They took out one olive.
Yes, one olive. One olive from the salad they were serving to their passengers. The salad taste didn’t change at all from missing one olive.
Maybe many passengers weren’t even eating the olives in their salads.
But that one (1!) tiny olive saved the company $40,000 per year.
It may seem like a small sum. But $40,000 every year, in 10 years, becomes $400,000.
With $400,000, a company can do a lot.
Thus, one tiny and insignificant olive has saved the American Airlines a significant amount of money.
Like this post? Support Money Bear Club on Patreon for more!
↓Share this article↓