Hidden Cost of Approvals: Why Cheap Items Cost More
The hidden cost of approvals is the work time lost while people wait for sign-off. Here is the FAVI glove story and how to measure the real cost in your team.
The hidden cost of approvals is the work time that disappears while people wait for sign-off, and for small purchases it is often higher than the price of the item itself. McKinsey found Indian managers already spend about 21 hours a week in meetings, so every extra approval loop competes for scarce time. Here is the story I tell in my sessions, and how you can measure it in your own team.
TL;DR- A cheap item can carry an expensive approval: the FAVI glove story shows time lost beat the price of gloves.
- Always put two costs side by side: the price of the item and the work time the approval consumes.
- Measure one routine approval from request to collection before you change anything.
- Savings are real only when the total of both costs goes down.
What is the hidden cost of approvals?
Every approval has two prices. The first is the rate of the item, which everyone asks about. The second is the work time spent getting permission: people walking around, waiting for a signature, and machines or desks sitting idle. That second price rarely shows up in any report. When I talk to HR and operations heads, this is the gap that surprises them most, because the control was introduced to save money in the first place.
The FAVI glove story: ten minutes for a pair of gloves
FAVI is a French company that makes automotive parts. In its older procedure, a worker who needed new gloves first showed the old pair to the boss, took a slip, then went to the store and handed over the slip to receive new ones. The whole loop took about 10 minutes. The gloves were cheap. The permission to get them was not, because the worker was away from the machine for the entire loop.
How Zobrist counted the real cost
The boss, Zobrist, did not just look at the glove bill. He calculated what it cost to keep the worker away from the machine during that loop, and the figure was higher than the cost of the gloves. So he opened the consumables store. Workers could now take what they needed themselves, and the slip-and-boss round simply disappeared. The control had been protecting a small number while quietly burning a bigger one.
Why nobody tracks the cost of waiting
Ask any office about the rate of a purchase and someone will have it. Ask how many people were involved in approving it, or how long work stopped, and silence follows. Nobody owns that number. Finance tracks spend, not waiting. That is why slow approvals survive for years: the cost is spread across many small delays, each too minor to complain about, yet together they shape how fast a team really moves.
How to measure approval cost in your team
Pick one routine approval, such as a stationery request, a small repair, a software licence or a leave swap. Record the time from request to collection, count the people who touched it, and estimate the work that paused meanwhile. Then add the value of that time to the item price. This is the practical takeaway from the video: measure one approval end to end, then decide. You can also explore our behavioural training pages for building ownership habits.
| Step | What to record | Why it matters |
|---|---|---|
| 1. Request | Time the person asks for the item | Starts the clock |
| 2. Approval | People involved and waiting time | Shows the hidden cost |
| 3. Collection | Time the item reaches the person | Ends the clock |
| 4. Work paused | Machine, desk or task idle during the loop | Converts waiting into money |
| 5. Compare | Item price versus total approval cost | Decides if the control is worth it |
When to open up approvals and when to keep them
Not every approval is waste. High-value purchases, safety-critical items and legal commitments need a check. The test is simple: does the approval cost plus the item cost fall when you remove or simplify the step? If the answer is yes for low-value, repeat purchases, open them up with a clear limit. If not, keep the control. Trust works best when the limits are written down and everyone knows them.
How I bring this into corporate sessions
In my leadership and behavioural sessions I use stories like FAVI to help teams see friction they have stopped noticing. Participants map one approval in their own department and discuss what can be trusted to the person closest to the work. You can see the formats on our signature programmes page, or contact us to plan a session for your team.
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Avinash Chate TEDx Speaker · Founder, The Future Corporate · 11+ yrs experience Avinash has trained Indian Army, BRO, RBI, BARC, JSW Steel and 1000+ corporate leaders across India. His work focuses on leadership development, communication skills, and behavioural training rooted in Indian values and modern business needs. |
Frequently Asked Questions
What is the hidden cost of approvals?
It is the work time spent getting permission, such as waiting, walking and paused tasks, which can exceed the price of a small item.
What did FAVI do about glove approvals?
In the FAVI story, a worker needed about 10 minutes and a supervisor slip to get gloves. Zobrist counted the cost of that lost machine time, found it higher than the gloves, and opened the consumables store.
How do I measure approval cost in my team?
Choose one routine approval, record the time from request to collection, count the people involved, estimate the work paused, and add that to the item price.
Should every approval be removed?
No. High-value, safety-critical and legal items still need checks. Simplify low-value, repeat purchases where the total cost of the approval is higher than the saving.
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