Stephen Redwood shares an article that explores managing resources during disruptive times.
As companies go through phases of growth and decline, innovation and stasis, integration and diversification, resource needs fluctuate in terms of numbers, types and capabilities. Even for eminent companies such as du Pont, General Motors and Sears Roebuck, these cyclical phases have more often than not resulted in – as the professor of business history, Alfred Chandler, once wrote – “Resources accumulated, resources rationalized, resources expanded, and then once again, resources rationalized.”1
It is an unfortunate reality that the “resources rationalized” part, more often than not, relates to reducing headcount. How best to achieve that is a common source of questions from clients, often hoping for some magical thinking that will enable a rapid and relatively painless outcome. The reality, however, rarely matches those aspirations but not because of a lack of possibility, more because of a lack of method.
Determining the types and sizes of particular resource groups required in the short term versus those likely to be needed in the longer term is a challenging task when faced with the need to undertake a rightsizing transformation. This speaks to the importance of finding the right balance between strategic potential (“doing the right things”) and tactical details (“doing things right”).
A lack of access to adequate data or an understanding of the reasoning behind why things operate as they do only add to the challenge. This is often compounded by variance in job roles and responsibilities across organizations.
Ultimately, though, there is a finite set of ways to look for savings opportunities, but unless changes are made to the flow and volume of work in the business, none of the savings will stick.
Once identified, savings should be prioritized so that a properly managed transformation program can be established to ensure objectives are achieved without upsetting key growth or innovation initiatives.
Key points include:
- Assessing the landscape
- Restructuring at the top
- Bending the cost curve
Read the full article, Separating the Forest from the Trees, on RedwoodAdvisoryPartners.com.