Are you in a dilemma?
The last two-quarter revenue dropped by 35%. Few companies are starting to cut the number of employees. You are confused and under pressure by top-management.
TT Strategy: You are following the TT (Tension Transfer) strategy. Your boss is pushing you for better GP (Gross profit) and cash flow. You are pushing back downstream to get a quick resolution. You have crossed your fingers, and you expect that things will start to change from the next month!! Will it change positively?
Strategies: Learning from Family Management:
Core-Context-Cease strategy: But in the case of your family management, you are fast and smart. Already you dropped your Driver and maidservant. Because you know in the coming six months, you don’t need them. You dropped your Driver, but you did not sell your car (Fixed cost/Investment decision/Big Rock in your budget strategy). Because you know if you sell now, you may not get proper value, or you do not know what will happen after six months. Maybe the ‘new normal’ will again be the ‘normal’. You may use your fixed asset/long term investment again what you have aimed in the periodic plan.
Emergence of non-materialistic culture: You see a transition period from materialistic culture to non-materialistic culture. That gives you a further cost-saving opportunities. You are planning to change your sofa-set and redecorate the drawing-room (Avoidable & Must need cost strategy). But for the next six months, it is not a must factor.
Nowadays, you do not need to incur expenses for new dresses and a budget for a family outing while maintaining social-distancing. The demand list is full of NEED factors. WANTs are reducing.
Moreover, you find alternative ways to live a quality lifelike reading, story sharing, watching movies, etc. Your family is slowly adapting to the situation (Go Slow Strategy). Sometimes you feel the ‘new normal’ is better than ‘normal.’
Organizational Implications: It starts from the bottom-up approach. Need to engage every employee to classify every single activity into Core (must need), Context (Recurring) & Cease (Less valued Job). We need to look for alternatives for core jobs & use IT lever for replacing the repetitive activities, for example, chatbot for FAQ to reduce cost. Two parameters we will keep in mind while classifying activities into Core, Context, and Cease. First, we will analyze the basis of the contemporary situation. We will consider the time frame as a Short-term and Super Short-term basis. Because every Job has its merit. But it changes its importance level as per the given situation. Here we can provide an example of the need for Driver in your family management. The second most important is the cost-benefit analysis of every set of activities.
Note: This project may not be received expected results if it does not lead from the top. Also, we need to make an organized approach with a proper KPI.
Further breaking down the Core Activities to reduce or replace:
As your life-partner is increasing your routine task (Floor washing to vegetable cutting), you start to analyze maidservant works (work break-down strategy). You find some fantastic results. You start sub-contract the vegetable purchasing to cutting stage from your former housemaid with a lower package price (Re-negotiation Strategy with your Suppliers). She is employed right now two days a week and delivering the goods staying outside the home, maintaining the proper social distancing. You (Top-down Approach) differentiate the task as internal and external household works (Breaking down the Core to find Auxiliary Activities), which were earlier defined as solely internal work. Moreover, you engage your security guards, apartment managers, and other close contacts to purchase day-to-day necessities. It saves your time as well.
Organizational Implications: It is the second phase of the Core-Context-Cease strategy and will be led by mid and high-level management. Here we will further break-down the core activities to reduce the augmented parts and use an alternative process to reduce cost or increase efficiency. For example; Omnichannel strategy can be introduced along with existing sales and customer service force to increase the market coverage. Gamification strategy can be introduced to increase the referral groups. Gamification may help to reduce current sales force numbers without hampering the market share from active customers. Or only Power Bi and any other software/apps can ease the process of collection. It will help to increase efficiency and reduce headcounts.
Spare Time Strategy (Win-Win):
You are doing home-office. You are equal and even better productive than before (HR Strategy: Need for new employment Agreement). Still, you get time to sleep 8 hours, exercise in between official tasks, help your partner in household works, teach your kids, and spend quality time with your family. As you see a new opportunity here, you said no to your kid’s private tutors. It saves cost again and increase real value to your kid’s learning process (Opportunities to create Win-Win strategy). You have got options to create more value in the same working times.
Organizational Implications: Do we need the office while more than 30% of our total workers are white-collar doing home office? Moreover, can we revise the employment contract and provide a more flexible nature of working hours so that we can ensure productivity and reduce employee cost to the company? For example, a fixed five hours in a standard slot and rest in an independent manner. If we provide options (flexibility in job schedule with 20% salary cut) to top management, they may accept the options as the opportunity cost of 20% salary cut may be lower to this niche. It depends on case to case. But a huge chunk of the cost is holding in this layer. Of course, integrity and conflict of interest are the facts that we need to balance.
If it helps, I will be thrilled. In our next article, we will try to analyze the symbiotic relationship between organization and environment. Nature gives it back what it takes, but we need to adapt and wait for the right moments for change.
Thank you.
Saraf Khan
Cell: 01730783200 / [email protected];