Let’s say that sales, marketing and customer service all report to you. You’re in a management meeting and the CEO says, “Business is slow. I want you to cut front office staff across the board by 15%. Should you push back? And if so, how should you push back?
I’m not asking a rhetorical question here. Please respond with your comments so we can start a lively discussion thread. Yes we can discuss on Linkedin, but the quality of the CustomerThink membership so far exceeds any comparable Linkedin group that we can generate much headier discussion right here.
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Dick: Objectives like the one you posed are so common today that our inboxes would be full of daily alerts if we were tracking them. Such edicts are the “cotton candy” of business objectives–we feel good when we achieve them, and they’re not that difficult to do, but in the end, we’re no better off than where we started–and quite possibily worse off.
Actually, very possibly–unless you consider the risks that will ensue. For example, support staff payroll can be cut 15%, but the remaining staff will only be able to resolve 80% of the daily inbound cases. What will be the outcome of the 20% unsolved? What will be the revenue loss? Roughly, if it exceeds the cost savings, you’ve just worsened your financial situation–not improved it. Add to that problem the fact that if you’re operating under the delusion of risk-free staff cuts, you won’t even know the unintended consequence until you’re reading the latest quarterly report! “Oh yeah–the revenue curve drops off in April. Tom–wasn’t that about two weeks after we had those RIF’s in our call center?”
The opportunities are dead easy to identify–save 15% of expenses! Who’s not in favor of that? But almost every cost-savings initiative carries concomitant risks. (If risks don’t exist, the decision whether to eliminate a given expense becomes simpler). The top questions to ask are what risks will we face? At what cost? How will we manage them?
Andy – I totally agree with you. The shame of it all is we can reduce service, sales and marketing staff by 15% in most companies while improving performance. But not by cutting. It takes streamlining work by restructuring office process – a fancy way of saying getting rid of all non-value adding activity.
[sidenote: guess this effort to imitate Linkedin threads ain’t working]