To be productive, there are only two things you can do in business:1-add value
2-save costs
Now then - which are you doing right now?
The above words of wisdom were sent to me by a good friend and X boss. While I love the simplicity and see no need to mess with them, I would like to suggest there is something to be said for the order in which they are presented, especially given the times.
While all for running a tight ship, I am more than a little concerned for those companies focusing first and foremost on cutting costs, but giving little or no thought to adding value.
Particularly disconcerting is the all to common practice of cutting programs aimed at improving the skills and knowledge of long standing employees, or worse yet cutting the people themselves.
I suspect most, if not all of these these companies are going to find themselves behind the eight ball when the markets turns, if not before. And, when it comes to time to staff back up, the cost of regaining, or retraining the skills and knowledge lost may be more than many can bare.
So if your response to the question posed above is simply "I'm cutting costs" and you haven't already developed and implemented a plan for adding value, you might want to rethink your approach.
What is the best, and likely the least expensive way to add value, regardless of the times?
We would suggest the answer lies in retaining and further developing your best people so your company can deliver a superior customer experience that differentiates you from your competitors, both today and in the future - a logical strategy for both good times and bad!
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Jim
ReplyDeleteI couldn't agree more with your comments about organizations cutting people with a wealth of skill and knowledge. I'm sure that many of us have worked for such a company. I'm convinced that the "bean-counter" philosophy becomes a major driver in these companies when times get tough. Obviously, more short term dollars are saved by cutting a 20 year employee than by cutting a rookie. However, this strategy is often very short sighted. The loss of knowledge and skills is seldom replaced, and the organizational culture can be severely impacted. Short term gain for long term pain.
Sometimes in order to get where we want to go, it is important to know where we've been. No one wants to see successful processes forgotten, or costly mistakes repeated. If companies continue to cut their more experienced employees, what will become of this corporate memory?
ReplyDeleteSage words, and I think I can guess who originally gave you the words of wisdom :-) The other element I would add came from something you were doing in HKBC that we borrowed from you and implemented in Malaysia - Service Leadership. The philosophy behind it really did ensure that creating positive customer experiences were paramount in the minds of the whole team, consistently and effectively.
ReplyDelete