The downturn in the economy is continuing to bite – and yet again organisations are ‘letting their staff go’ (what a horrible euphemism) rather than adopting more imaginative steps: or are they doing the right thing? Should business leaders cut off limbs or departments to reduce costs, or make the business ‘go on a diet’ and reduce all salaries and benefits? As and when the up-turn happens, will these businesses realise that they have cut off too many departments, (lost too much blood), lost too much of their skills base, and so have destroyed the heart of their organisation?
Every day there are examples of organisations agreeing salary and benefit reductions in preference to redundancies (diet not amputation), which is excellent news: good long term thinking. However Graduates, for example, have been told that they are going to struggle to find training contracts (Lawyers, Accountants, Surveyors) management programmes, etc., because too many organisation cannot met their commitment to take them on for another year or two.
Apparently one reason for this in the legal sector is because the Law Society has set a minimum wage – which is not that high – but which now is working against those hoping to become lawyers. History offers some interesting lessons and one answer maybe to revert to some form of paid or sponsored Apprenticeship or Pupilage as seen in Barristers’ Chambers or Articled Clerk!
On the other hand, according to many pundits, we already have too many lawyers and accountants. With the Legal Services Act coming into scope in 2011/12, this too will shake up law firms, so maybe not taking on Trainees saves having to make them redundant later. However, this approach to recruitment of younger staff will also hit at the development of the knowledge and skills base of those organisations. The demographics of the growth in our aging population, globally as well as in the UK, have not altered.
Courage of your Decisions:
Understanding what makes the business work is one of the hardest questions any leader has to answer. Inherent to this is in understanding the Risk and Reward balance, so that any action taken will enable that organisation to survive and be fit enough for the longer term or not.
Several years ago a young mountaineer, Aron Ralston, after being trapped with his arm under a rock for five days, decided that if he did not get free he would die. Using his pocketknife, he amputated his arm below the elbow, put on a tourniquet and administered first-aid. He then rigged anchors and fixed a rope to rappel to the floor of Blue John Canyon. It is impossible to imagine how this young man felt in making his decision, it could not have been a light one, and yes he had to weigh the balance of the risk in losing part of his arm and the reward of surviving: or dying.
Management Boards and Executive Teams the world over too, are having to make organisational decisions that are in effect life-surviving or life-threatening. They need to balance what they can trade without, perhaps where they have built in unnecessary or ineffectual staff, or currently use in-efficient external agencies and so terminate them and their cost. This is often redressing poor decisions of the past and acknowledging and taking responsibility or those actions. Smart Executive teams though are those who understand that whilst their selection of people may have been poor, (or not well managed) the need for those ‘limbs’ remains essential.
Opportunity Knocks:
As every door closes, so another one truly does open and we should see a new dawn of the ad hoc / interim resource on Performance based Retainers. Any internal or external resource supporting the business needs to be familiar with and be part of the wider ‘family’ of the company. Randomly bringing in additional support without proper induction, training and imbuing people with the culture and values of the firm, will re-create the ineffective carbuncles of before.
Now outsourcing services for Finance, People Management, Marketing, Training and Development, IT, by using interim or project managers, will come back into vogue because organisations still need access to expert know-how. Critical to success is to ensure a proper matching of not just the skill, but the value, energy and ethos (or blood types!) of the consultants selected. Bearing in mind a Consultant is someone who has had not just 20 years of doing the same thing each year, but rather over 20 years they have learnt and developed specialist skills that now make them an expert in their field. (I am one of the few people you will ever meet who can accurately claim to be an ex-Burt!)
Buyer Beware:
Sometimes when looking at career choices going into Consultancy or Coaching seems like a good idea. Now is a time when organisations should be mindful of the old saying: ‘Buyer Beware’. They should ensure they are not just getting a cheap resource who will take a long time learning their skill at the organisation’s expense but be more discerning. This does not mean that there are not many excellent and capable people turning to consultancy as a livelihood in 2009!
With these shifts in the style and manner of engaging skills and knowledge resources but only when the organisation needs them, Management Teams have the chance to re-visit their organisational structure, identify the essentials and the ad hoc and start to build relationships. This includes at times the need for a ‘transplanted organ’, or team which will inject new drive and focus.
We are at an interesting turning point in the world of employment, where traditional approaches just may not be relevant in the future. Perhaps this is just the start of a much bigger debate about ‘jobs for life’, minimum wages, or indeed employees’ rights. Should we wonder whether we have so indulged ourselves, so gorged our businesses on legislation and EU regulations, that we have made them inactive, sedentary and obese?
Should we be putting all employees on notice that things are going to be different? Both organisations and employees need to be capable of dieting or being a transplant – or be amputated.