Friday, September 25, 2009

qualityg says ... "CUT COSTS ---> NOT EMPLOYESS"

Enough already, it is time for Management to start earning their money for the remainder of 2009 by developing or benchmarking ways by which to improve the bottom line by cost cutting as opposed to cutting their number one asset --> people.

You hear it almost everyday – a company laying off part of its workforce - to improve profitability or as the last resort to stay in business. Why does it reach that point? Why do leaders resort to this method? Why can’t companies reduce costs without getting rid employees? The answer is they can. But it can’t be in response to short-term thinking or a crisis. It must be hands-on approach, it must involve "Hands On" leadership. Cost cutting must become an on-going objective that is as important as any other Accounting or Finance effort.

It is so easy and shortsighted to cut employees regardless of what Management will tell you or what you read on-line, magazines and newspapers. So-called leading experts from top rated business colleges do studies and research on the best ways to remove people from the bottom line with little impact on the organization. They are full of crap and when they do instruct (instead of just research with no application) they fill the next generation of leaders and managers with the same crapola. It has been going on for years, I am a product of that schooling and I’m just lucky I found the teachings of Dr. Deming to help set me straight in 1980.

I have personally been involved and had to make decisions as to how many and what employees should be let go. Each and every time I fought for other ways by providing examples of other companies, ideas and probable solutions other than cut people. The problem with my input was it took too much time according to other decision makers and the charge to get rid of heads was to be done soon, quickly and above all quietly. Do not let employees and the most feared of all “The Media” get wind of what was in store for the company. Again, a bunch of crap, “GUTLESS” is the optimum word for these type of managers and leaders.

What I propose you do for the remainder of 2009 is to form a cross-functional team that represents all departments under the “Active” leadership of a decision-making Vice President.

The type of cost cutting will be Discretionary and Headcount related (not cutting employees but may involve different jobs, movement, reporting structure, etc…).

Here are some examples and ideas that if looked at closely can save a company large amount of dollars and not lose efficiency or effectiveness of operations. Some may seem harsh but I’m betting the majority of employees (don’t say NO until you ask them) would rather keep their jobs with some signed assurances and agreements with the leaders of the company.

· Freeze all Salaries (until you no longer have to cut people)
· Renegotiate and cancel consultant agreements (trust me, you have the
knowledge inside your company, look for it, use it, trust your people)
· Your employees will always make better company decisions than 99% of
business consultants out there. Why – because they care and LISTEN!
· Reduce Company Picnics and Parties
· 2 Week - Month Vacation w/o Pay
· Giving up monthly Reimbursement Perks (i.e., phone cost, car allowances)
· Use Internet as source for cheaper fares (car, plane, train) and hotels
(cancel contract with travel agencies)
· Turn in all unnecessary pagers and cell phones
· Revisit who needs cell phones and update cell phone plans to best provider
· Reduce Travel Per Diem allowance unless dining with customers
· Discontinue company-paid annual dues for professional organizations.
· Give employees the option to work 37 1/2 hour workweeks, which allows a 20%
reduction in salary. Work in combination with flexible work arrangements
· Discontinue funding for all Business Resource Groups (including registration
for annual conventions, travel fees and annual gala balls)
· Remove unused and outdated Telephones and Lines (computer, fax)
· Renegotiate supplier contracts to single-source suppliers
· Remove all copiers (and contracts) and use local printers
· Return all unused equipment to vendors and free up space
· Reengineer Work Stations to save on space (sell or lease free space)
· Carefully look at an effort to move towards virtual office to realize real
estate cost savings
· Re-negotiate cost of leased space (if applicable)
· Cancel Coffee and Bottled Water contracts
· Cut out goofball training by consultants
· Prioritize work place upgrades (i.e., cafeteria, gyms, conference rooms)
· Change Sales Compensation Plan to pay at in-effect with additional incentive
for Sales to sell high margin
Allow employees to work from home 1-2 days a week saving on energy costs.
· Revisit Procedure staff guidelines / Processes / Contract. Too many mistakes
occurring and nothing can be corrected and we the company is paying for the
consequences - we pay people to make mistakes (poor processes/machines) and we pay other people to fix them with no prevention for the future

The above items are just the beginning … C’mon do something good for the remainder of 2009, give your employees a chance to determine their own destiny, don’t punk out and take the easy academic bottom line management way.

1 comment:

nisha said...

I have been reading your post regularly. They are highly informative and helpful.