VideoDavid McCann, CFO.com | US
December 9, 2008
- More certainty in people decision
I am thrilled to see an article like David McCann's in CFO.com.
The staff cutting we are currently seeing makes no sense from a long term perspective. Recovering from this downturn will require increased consumer spending as a key element. Out of work people cannot buy your goods and services. Companies who lose key staff cannot innovate and position themselves for renewed financial health.
The attached blog highlights ways companies can use workforce analytics to help with the difficult people decisions they face.
http://www.knowledgeinfusion.com/coe/blogs/infuser/2008/12/15/guest-post-at-infuser-by-joanne-bintliff-ritchie
We will see if the companies who were more creative in their approach to streamlining costs and found ways to retain and leverage value are the ones who experience an earlier and stronger recovery. My bet's on them.Posted by Joanne Bintliff-Ritchie | Dec 23, 2008 12:39 PM ET
- Cut Cost of Goods not People
There are inefficiencies in almost every supply chain. Try Spend Analysis of procurement data to identify quick cost cutting that directly affects the bottom line. That way you can cut costs without cutting people.
Posted by Karen Price | Dec 16, 2008 9:07 AM ET
- Maximizing Long Term Stakeholder Wealth
David McCann makes some excellent points in his article. Many wrongly take a narrow view of the stakeholders in a company as only those who hold stock or are secured creditors and many others focus on expected financial results for the next quarter without the perspective of what will be best for the company over the next 5 to 10 years, or longer.
What it comes down to is maximizing long-term stakeholder wealth. Strategies should be evaluated on a risk-related NPV of cash flows over several business cycles as far out as can be reasonably determined. While this might arguably vary slightly across industries, I have been served well in viewing the stakeholders as first stockholders, then secured debt holders, then employees and key advisors, then customers and potential customers, then the vendor supply chain, and then community relations starting locally and extending throughout the global community.
Putting employees in that position is a recognition that financial statements always omit the company's most important asset, which is its employees. Extending stakeholders to include community relations recognizes the obligation of the company to fulfill its responsibilities as part of our closely interconnected world.Posted by John Henrie | Dec 12, 2008 10:12 AM ET
- Proactive on top of stratgic mind set and long term view
Being involved in helping the company I worked for staying ahead of the game and maintaining stability and competitive during dot com bubble busted, I learned a great deal of how important it is to be proactive with strategic mind set and long term view. It can preserve its most valuable assets, and keeps it ahead of competitors.
What we have seen recently of all of the news about XYZ company cuts x% of its work force, is more a reaction, and thus the companies will ultimately pay for their actions when the market turns around.
If senior management has the strategic mind and being proactive, they would have seen things coming in the end half of 2007. It has taken a year or more to finally take actions to "protect" / "save" the companies. This is reaction at the last minute, which is to easiest way to realize "savings" but with huge price tag (in $ and many innocent people and their family, and potentially to the future of the company).
If actions are taken earlier even it involves in layoff, the impact to a company?s intangible asset could be minimized because it has "time" on the equation, which just like investment education we hear all the time, start earlier even it is small, the benefit over time is huge.
Of course, a meaningful forecasting process is the foundation of all of the above.
Hope we can continue to learn from what happened, and not to let history repeat itself for the same mistakes we made.Posted by Sharon Zhao | Dec 10, 2008 11:46 PM ET
- Organizations Need a Long Term View
I cannot agree more with point about the long-term financial impact on cutting talent during a downturn. Sometimes it is necessary, but too often organizations fail to take a longer-term view of their staffing needs and have the necessary understanding of what skills are required to be competitive three, five or even ten years down the line. Having insight into how the organization will continue to execute its strategic plan without certain employees, and how cuts will impact overall execution on that plan is critical. Creelman Research wrote a good paper on this subject available here - http://tinyurl.com/56gswo
Posted by Donna Ronayne | Dec 10, 2008 1:21 PM ET
- Be strategic
The organization that I worked for was not strategic in that they waited too long to make stategic decisions about discontinuing certain operations, and then was forced to make cuts to arrive at a balanced budget for 2009. In other words, instead of managing its money (recognizing declining revenue streams and making strategic reductions based on what the stakeholders were willing to pay for), its money managed it (waiting too long forced hasty decisions).
Posted by Douglas Shearer | Dec 9, 2008 10:56 PM ET
- Intelligence
Cutting out the "deadwood" is vital, so long as you can guarantee it's truly deadwood. And the excising of unhealthy tissue can make the entire body function better.
With a metric like XySync.com, the intelligence is available to do so. Without it, organizations are doing surgery in the dark.Posted by Ran Vosler | Dec 9, 2008 6:37 PM ET
