Giraffe Forum

Managers in large organizations are too concerned with downsizing and cost cutting and not concerned enough with efficiency, productivity and customer satisfaction.

“Much of the conventional wisdom about downsizing—like the fact that it automatically drives a company’s stock price higher, or increases profitability—turns out to be wrong, Jeffrey Pfeffer writes for Newsweek in February 2010. Pfeffer writes that there is “empirical evidence showing that labor-market flexibility isn’t necessarily so good for countries, either. A recent study of 20 Organization for Economic Cooperation and Development economies over a 20-year period by two Dutch economists found that labor-productivity growth was higher in economies having more highly regulated industrial-relations systems—meaning they had more formal prohibitions against the letting go of workers.”

“Buy new technology so that you can let people go” is a golden rule of modern management. There is a belief that the very purchase of technology will in and of itself make the organization more efficient. People are the problem. Technology is the solution.

At some point, letting go of people becomes a counter-productive strategy. At some point, managers need to focus on the people that are left within the organization. A manager needs to ask: How can I make my staff more productive and efficient, not with a view to letting some go, but rather with the objective of making the organization more competitive?

Organizations bemoan the loss of customer loyalty to brands. Loyalty is a two-way street. From an organizational point of view, loyalty begins after the customer has bought the product or service. Loyalty is built or lost when the customer has a problem and needs help from the organization. The downsizing devotees invariably try to spend as little as possible in customer support. Long term, they reap the consequences.

The end objective of technology should be to extend the capabilities of people, not to replace them. Sure, as technology drives efficiency some people will lose out, but that should not be an objective in and of itself. The objective should be to become more efficient and deliver a better service to the customer.

Properly managed, an intranet can deliver greater efficiency and reduce costs. It can help staff carry out tasks faster. It has that potential, but it is a potential that is not being realized in most intranets because of a lack of focus on the tasks and the staff who need to carry out the tasks.

Technology must ultimately be for people, not a replacement for people. I have met many managers over the years who have little or no concern whether the time of their customers or staff is being wasted by websites with confusing menus and links and poor search results. However, if I tell these very same managers that I’ve found a way to reduce headcount, they get very excited.

The goal of the organization should not be to fire as many people as possible. The goal should be to become as efficient as possible. To achieve efficiency we need quality people working with the technology to test, tweak, mould, refine, adapt, plan.

People are not always the problem. And technology on its own is rarely the solution.

Lay Off the Layoffs
http://www.newsweek.com/id/233131