To say that we are currently experiencing a global financial meltdown would be an understatement. From city to city and country to country, previously unheard of news, of major financial institutions facing bankruptcy and the billions of dollars of government aid, trying to avoid this, has become the staple diet of news reporters, globally. So, what do a responsible CEO and their organisation do in times like these? It is time to cut costs and in some cases, an opportunity to justify bad news, blamed on the current situation, often hiding the real problems that are more endemic within the organisation, rather than a real reflection of the current financial crises.
And who would blame a CEO that takes advantage of such an opportunity to trim-down costs while at the same time gaining respect for acting responsibly in adverse market conditions!
We all know that a significant and quick cost-cut is always in the headcount! Over the years we have diligently outsourced non-core activities, lowered our operational costs, may be moved into cheaper offices, replaced old costly technologies with new, efficient and cost-effective ones and now, the one large cost line in our P&L is people! A few heads gone…. and we significantly improve our bottom-line, now able to report better news in worsening economic climates. There you go, we are now stars claiming better than industry average results and the board and shareholders are happy.
So, we ask you to consider; does this mean that we have redundant staff that we had been unnecessarily carrying, allowing the organisation to incur unnecessary costs? As if not, then, this is the time we need this headcount. GREAT companies invest more in these down-times. They utilise the favourable times to negotiate better supplier rates and develop new products/services/pricing to take-on their competitors that are more internally focused, reading the numbers to make staff-cuts resulting in weak moral in their organisations perfect for you to reap the benefits of this market opportunity.
Again, in this situation, referring to the “Bad” News article, we have looked at the tough market conditions as an opportunity to grow our business, increase staff morale, negotiate new supplier pricing and gain momentum while our competitors are slashing costs and handicapping their organisations!
After all, you have invested significantly in these people. Unfortunately, we treat people as liabilities and costs in our P&L’s. However, the truth of the matter is that our people are our unique asset that increases in value with time. It takes time, effort and a few mistakes for the employee to go through the process of becoming a valued entity in the business that efficiently and instinctively understands the nuances of the business to be able to turn-around and make quick and mostly accurate decisions. All those years of knowledge are gone when that employee leaves the organisation and let’s hope he/she does not join the competition who is ready to leverage that newly acquired intimate competitive knowledge. And no non-disclosure contract can protect us from that, as we all know!
We ask you seriously consider, that Tough Times are in fact the time to hold on to your best asset, your people while your competition sheds their best asset.
And, we ask you, who is going to be the strongest, best-set organisation to take advantage of the unavoidable good times that follow tough ones? The organisation with better-trained staff, better-tuned products, Great staff morale and highly respected by the industry and all, for doing the right thing by their staff, or is it the organisation that “treats its staff as mere numbers in their P&L?
Last modified: March 27, 2018