As one of my most experienced and erstwhile colleagues recently said;
”…I’ve worked for all sorts of businesses and dealt with a wide range of people and one thing has become crystal clear…nobody really knows what’s going on.”
Whilst this may be a slightly grim and cynical view, it does line up with a conclusion I have made based on my own 30 years’ worth of observations of corporations. That is, when people do not really understand the situation or a way out of a predicament, they will resort to corporate waffle to mask their ignorance. And language can be powerful. If the culture of an organisation is hierarchical or authoritarian in nature, the big lie or doublespeak delivered by a leader will go unchallenged and unchecked. It ends up distracting the average employee from what is really needed to grow the business.
Apart from the political arena, the great cliché generator of the western world is the corporate sector. Things like “we put customers at the centre of everything we do”, “high performance is a part of our DNA,” “our operating rhythm creates synergistic benefits for key stakeholders” are not only vague but often misrepresent the reality of the company’s approach. These often spurious claims and the proliferation of literature and articles posted to the internet that purport to be research usually lack one essential ingredient – proof. It’s like Billy Connolly’s comment about TV documentaries on ghosts – there’s never, ever a real ghost!
Think about the oft used phrase of “we need to do more with less.” That’s fine but there’s rarely any ideas provided on the “how” to do this. What’s really behind this call to action? It’s usually a cry for help in the face of difficult external circumstances. When you strip it right back, the driver is a need for growth – to generate higher profits and better cashflow. The usual reaction is to cut costs. Why? Because it’s the shortest route to better margins in the short term.
If the primary input to production is labour then the headcount gets cut and the people remaining are asked to pump out the same or greater levels of output as last year.
Cutting staff creates a number of operational headaches and financial problems:
- Low morale leads to higher staff turnover and replacement/retraining costs
- Loss of corporate memory
- Dented cash flow caused by retrenchment costs
- Loss of productivity while people await their fate – “will I lose my job?”
And so the list goes on.
What are the alternatives to cutting headcount?
- Upskill your people with a relatively small investment in training that changes the way they think about their role in the broader enterprise
- Reduce expenses by changing your production process or operations,
- Increase revenue via a range of moves such as product extensions or adjacencies.
Yes, these tactics may require some short term investment but the upside is enormous. After all, economics and business is about the trade-off between risk and return.
So where’s the proof and examples of this working in practice?
UPS – following the revelation by one of their truck drivers in the US, UPS saved $x million a year by implementing routing that ensured drivers predominantly performed right hand turns rather than waiting at intersections to turn across oncoming traffic.
An Australian manufacturer – the week after attending a 2 day commercial acumen program (investment $25,000 for 20 people), the creative director changed his thinking about the packaging of the primary product line and saved the company $50,000 per annum. The CEO was ‘blown away’ that a creative person had changed their thinking to effect bottom line.
Airlines – the introduction of baggage fees by a range of airlines expanded their revenue streams. Many airlines now prioritise additional income streams to increase revenue. Now ancillaries such as these are major contributors to industry profitability.
Given our penchant for specialisation, don’t assume everyone who works in your business either “gets” business or understands the drivers of your business. Most people are too busy doing their specialist role to think outside the scope of their day to day tasks.
Make your existing people more capable and watch their productivity improve or come up with more innovative ideas for driving revenue.
This article was written by Stuart Findlay, Specialist Facilitator of the Building Business Acumen Program, exclusively licensed in Australia by Lighthouse. Please get in touch with Stuart for a confidential discussion on how you could upskill your people to drive revenue uplift in your organisation. Stuart can be contacted on [email protected] or 02 9091 0305.