More Focus on The Value
The truth is so simple, yet so difficult to realize for many managers. In times of crisis, headcount is the first thing that is reduced. When companies merge, focus is to monetize synergies (read: lay off people) instead of thinking about how combined competencies can increase the generated customer value.
Especially when the markets struggle, it is extremely important to focus on the customer value. In the Agile Advice Blog, this has been wrapped up nicely:
It’s true, of course, that staff are a substantial cost for most businesses. However, we sometimes lose sight of the fact that in any business where staff is a substantial cost, it also probably means that staff are responsible for a large proportion of the value your business generates. Cutting staff therefore means reducing value, and that just puts your business into a vicious cycle. Cut staff, deliver less value, customers and clients don’t get as much value, they start looking elsewhere, you get more revenue pressure, you cut more staff, etc. Not only that, but if you cut staff, but leave the bureaucracy in place, then the ratio of bureaucratic overhead to staff is increased leading to even worse productivity!
I can only hope that in future, more companies understand and are able to react accordingly. However, if insight comes relativly easy, the art is to transform the new knowledge into the state of reality!
Tags: agile, customer value