How Being Too Frugal Can Hurt Your Company

too frugal

“We’re not spending money on voicemail!” Jack Gifford, the CEO of Maxim Integrated Products said. “We don’t need it!”

Several other senior executives and I were meeting with Gifford and the subject of voicemail came up. Gifford’s negative response wasn’t a surprise to any of us in the room.

After all, Gifford was the same CEO who said employees didn’t need their own computers. Instead they could just share them. Indeed, Gifford didn’t have a computer, so he was leading by example.

I loved Gifford’s frugal mindset, but sometimes he went a little overboard. Actually, sometimes he went a lot overboard. And this was one of those times.

Gifford thought about what he said for a bit. Then he said, “I’ll tell you what we’re going to do. I’m going to buy answering machines for the people that need voicemail. That should work just fine.”

Gifford then left the meeting.

Two weeks later, good to his promise, we received answering machines as our voicemail system. Problem solved. Well, not exactly.

Gifford approved the purchase of the cheapest answering machines he could find. These were one cassette machines that had both your message and the messages left for you on one cassette.

Here’s what happened when someone called you:

Step 1: The caller would hear your, “I’m away from my office response.” Then…

Step 2: The machine would wind the cassette to next available place to leave a message. Then…

Step 3: The caller would leave their message.


The problem was you could wait for minutes before you could leave a message.


I found this out the hard way when I was traveling, and I called a member of my team. Kent was out, so I waited to leave a message. I heard a click and then I heard the tape rewinding.

The tape kept rewinding and rewinding. I said to myself, “Man, this is taking a while.” Then finally I heard a beep, and I left my message for Kent.

The next day I got back into the office, and it was clear what was going on. I replayed my messages.

The answering machine rewound for about three minutes. The first few messages were normal voice messages. Then the tone of the messages started changing.


It was only a matter of time before the complaints came rolling in.


“Hey Brett, what’s wrong with your voicemail. I was waiting forever to leave a message. You’ve got to get this fixed.”

On and on the messages went. Customers were pissed, and the employees were pissed too. But until Gifford changed his mind we would all suffer.


Then the inevitable happened.


It was only a matter of time before word got back to Jack. Then he issued an edict where if you walked by someone’s desk and the phone was ringing, you were supposed to answer it.

Of course, no one answered the phone. It was lame.

I can still remember walking through the hallways hearing an answering machine whir as it was rewinding. You knew there was someone was pissed off on the other end of the line.

I think it took about two months before Gifford finally relented. We would get voicemail.

Don’t get me wrong. I loved working with Jack. He was a mentor and one of the most brilliant people I’ve ever met.

But his frugality could sometimes produce, shall we say, unique results. Jack’s solution to voicemail is one that will always bring a smile to my face.

For more, read: Are You Being Appropriately Frugal And Why It's So Important? 


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