Use your head instead of your axe.
I was very angry yesterday. A company I greatly respect made the decision to “further reduce head count” in spite of already reducing heads by more than 50%. This move is in response to continued “disappointing” results. This company continues to see their sales shrink. They are hemorraging cash.
The customer service at this particular company is now poor. It was very poor. They’ve made some progress there but not much.
There are great sales opportunities for this particular company right now. By Jove, it’s the Christmas ordering season and this company has a prime Christmas product. But this company has numerous internal difficulties. When I heard that more people would be losing their jobs it made me furious. The marketing director got a big raise this year in spite of declining sales. That makes sense, right?
I’ve proposed to work with this company but they tell me they have to watch their expenses because of the serious financial position they are in. I believe now is exactly the time to use me. When business slows down and margins fall it’s time to use every resource available—time to take stock and get everybody to work on using every available resource to its fullest. Instead, most company’s first reaction is to start throwing valuable resources overboard.
I understand the urgency. Really, I do. But what frustrates me is that no time is spent considering the positive actions that can be made. The first order issued is always “look for ways to cut expenses”. Once issued, that becomes the whole focus of the business. Wrong focus (Business Astronomy 101). The business will cut it’s way back to the black while squandering valuable resource on the way down. It hurts to see it.
Example. I tried to place an order for more than $2,000 with the above mentioned company using their online system. Their online system doesn’t work. It hangs when I add my $2,000 order to cart. I spoke with someone yesterday about an order—they didn’t seem to have my account information nor did they have time to find it—had to go to a meeting. But if would call back at a specific time (later) they could straighten things out. I couldn’t place my order at the exact time time specified because I had other things to do. So I decided to use the online system. That’s when I discovered it didn’t work.
These problems alienate buyers. These problems are fixable with the resources the company has at its disposal. These problems are inexcusable.
Tell me, is the answer to cut costs, to fix problems or to strive to be great? You might need all three. The goal should be to be great, not smaller. The problems MUST be fixed. And the cutting may or may not be necessary.
Before reducing head count, think about the wealth of possibilities stored up in those heads. Sure, you may have to make the very painful decision to reduce your workforce but don’t make that your focus.
When the ship starts to take on water that’s not the time to throw the crew overboard.
Hey, who am I to say? It’s your boat.
Chris Reich, Author of TeachU’s Business Talk Blog