Turbulent times cause companies a lot of problems, and sometimes opportunities. One question our clients ask is how to staff the current operation to support the business, without cutting out so much muscle that you lose the ability to grow or improve your profitability. There is a break point in that discussion and the answers depend upon what your end objective is.
We’re used to seeing nearly annual reorganization by our clients in the pharmaceutical sector. The reasons behind this are related as much to the need to show a positive return on the balance sheet as they are to addressing shifting market needs. I believe that some companies continually refine the quality of the sales force, for example, by doing a nearly annual lay-off to avoid having to dismiss staff for cause and taking the chance that they will be sued for wrongful discharge. But, hey, I get it. The average time to run someone through the discharge process is about 9 months. That is a long time to wait in a turbulent business environment to make a change and correct a performance problem.
So if your end objective is to enhance the quality of your workforce, then perhaps consider the lay-off method to clean house. If you choose this method, be sure that the criteria you use to do your lay-off is based on organizational need, and not personal preferences for various individuals. While I am very concerned about age discrimination, I think seniority is poor criteria to use for the lay-off benchmark. It is easy to use and a very clean method, but it may not help you to prepare for the future, based on your future vision, or enable you to maximize productivity in the current environment. On the other hand, your older employees have a lot of knowledge and experience. They can be a great source of advice and counsel on what to try, what has worked in the past, and what to avoid to weather the storm. So you will need to weigh both sides of this logic as you make your decisions in the final analysis.
If you are moving in a new direction or perhaps seeking merger and acquisition opportunities in the marketplace, you’ll want to focus on enhancing productivity of your workforce as much as you can and increasing your profitability. But again, don’t start with the names of the people and pick your favorite people. Start with the goals and objectives and your strategic plan for the future. Be sure to review this plan carefully with current market conditions in mind. You probably won’t have the resources you might have had 3 or 4 years ago for development, resources or marketing. So staff to achieve that new plan, given the available resources you do know you have.
In tough times, it is a lot less expensive and more profitable to sell new products to existing customers than it is to generate new customers. The proviso here, however, is that your new strategic plan needs to be aligned with the opportunities and needs of your existing customer base. If not, then you will need to identify your less profitable customers, downsize them, and put your resources toward developing new business in new channels who will help achieve your plan.
The whole point in solving the impact of the turbulent market on your organization is that we need to evaluate what resources we have, time, money, people and opportunities. Next, we need a specific idea of what we want to build that will take advantage of the opportunities which will emerge in the changing economic conditions. Then, we think about organizational structure to support the idea. And last, we assess the people, based on the criteria needed to achieve the new idea.
And be prepared. Sometimes, your top performers may not fit your new model. But with a clear understanding of the skills, knowledge and abilities you do need, you can staff to achieve those needs, even in a turbulent marketplace.
Filed under: Business, Talent Management | Tagged: Downsizing, lay-offs, layoffs, maximize productivity, reorganization
