Alan Cooper with one of the best posts I’ve read:

While it just seems like good, common sense business to keep costs down, this is merely a mirage, a chimera, an illusion left over from the rusty age of manufacturing. There is no longer any connection between what your product costs to make and the price at which you can sell it. Your employees are not turning raw materials into products, and cost accounting no longer works.

Your smart people are your capital, not your factory labor, and as Peter Drucker said, it is their productivity, not their cost that matters. The better you communicate the company mission to them, and the more you encourage them to spend time and money to innovate, the faster they will do so.

Businesses still think in an industrial way of doing things. A time where people would be doing hard mechanical labor. Today, creative people are creative because they love what they do.

Give them the problem, space, and support to solve it and they will. If you have the right people on the bus, and are solving an interesting problem, they won’t squander away their days browsing Facebook and Twitter. Arbitrary limits imposed by management for an old way of doing things, like having to be in the office for certain hours, doesn’t work and will push away the best, smartest people.