Perspectives & Strategy

The need to make wide cuts has probably been on the top of more agendas over the last 12 months than at any time in the memory. ‘When will it stop?’ I can hear many a manager ask. It seems to matter little what department you work with the cuts are plain to see. Yet the plain truth is that we have had to do the same amount of work, but with a much smaller budget. Despite proclamations that the recession is over, based on my discussions with senior management teams this situation is expected to continue well into 2010. Most executives recognise that some aspects of business are starting to return to normal, it is clear however that customers are keeping a tighter rein over their purses than at any time since World War II.

This gives us a big challenge in this new economy.

In November 2008 I reviewed the prospects for hiring in a tight economy and observed that on the job-front “certain sectors of industry are quite buoyant, despite all the bad news on the economic front.” The recruitment process has changed as a result of the economic downturn. Fewer ads are being placed in print (whether newspapers of in trade press), and more emphasis is being placed on finding new employees through personal connections and networking. This is true at every level even with blue collar recruitment.

In December I talked about Strategic Problem Solving and how the success of any organisation rests in the hands of the executives and their ability to solve problems. It is clear that businesses should look to modernise its processes before it looks to change its IT systems. At the end of the day system changes tend to be much more expensive to implement than process changes. When managed correctly process changes themselves can drive cost reduction in the corporation. We lose sight of the fact that a business process can waste resources. These wasted resources can be eliminated when properly examined. One area that should also be examined is Tele-working which can also bring about a reduction in costs, but this needs to be examined in relation to the risks involved.

One of the risks of a recession is that “short term demands can cripple your long term strategy!” The typical response to bad times is that we cut everything to the bone and plan and identify what projects can be dropped or put off till a later time. At the end of the day it is important not to cut R&D budgets and do not cut back on Marketing effort. The wise company spends extra on marketing in bad times. The other area that should not be cut is Business Intelligence which can assist the corporation in plotting the path through the economic changes by focusing finance and marketing efforts.

Earlier this year I talked about the advantage of good Business Intelligence and how to leverage information to create a competitive advantage. In all too many organisations data and information is not used to the best advantage of the corporation, decision tend not to be fact-based. Businesses need to be smarter and to make better decisions. Making better decisions means using the information contained within our Data Warehouse and applying relevant analysis in order to make informed decisions about how to manage the business. With all the data at our finger-tips we stick our thumbs in the air to see which way the wind is blowing.

This recession has continued perhaps longer than any of us anticipated. Many businesses would like to say “Hold your horses we are only running a limited number of projects this year” this simply does not meet business reality. So it is important to have a management policy to manage competing priorities. It is not a matter of whether or not to prioritise. It is largely a question of who is the most appropriate person to do a specific task and providing clear priorities within the context of the overall priority list. In the absence of priorities, team members will use their own prioritisation methods. First in first out (FIFO) is rarely the best form of prioritisation, yet it is the method that most people will fall back-on in the absence of any other method, which is why focusing of corporate priorities is so important.

At the end of the day it is still possible to deploy solutions on a shoestring budget. Corporations are nervous about spending money, yet business must go on. Every department is asked to do more with less dollars, yet the source of any cut-backs is not simply by kicking staff out onto the street, although we have seen that happen in record numbers. Statutory compliance will also rank high on the agenda, even if procedures were fully compliant the auditors will be carrying around their magnifying glass for the the immediate future and I expect them to question everything in the annual reports this year.

Every part of our business, including Information Technology, needs to be integrated into the core of the business. We are no longer running a business of separate parts each moving in their own direction, we need to be running a well oiled machine that is focused on the end goal. We have here come back again to ensuring that our business processes are in-tune with those business goals. It is not uncommon for a corporation to define a set of goals then fail to live by them. Everyone needs to know what the goals are.

We need to blend the strategic business focus with making the right decisions across the corporation, combined with processes that are in-tune with business goals.