Right-sizing your organization for Recovery

Many companies faced layoffs during the past year as the economic downturn continued.  If your company was one of those, you may soon find yourself facing the other issue of deciding who or how many people to bring back.  The question “what is the right size for my organization to be?” is an important one – and sometimes a difficult one to answer.  The value of your company is directly affected by how productive your employees are – more productivity generally means more profitability.  If you want to maximize value, you must right-size the organization.

Right-sizing means having the right number of the right people in the right jobs to accomplish your company’s goals and objectives.  With that concept in mind, you should “begin with the end in mind,” as business writer and consultant, Stephen Covey, would say.

Your company’s goals and objectives:  The downturn may have drastically altered your company.  You may have repositioned yourself or changed product lines or markets to make it through the tough times.  Now may be the time to think about who you want the company to be in the recovery.  Do you want to continue with the strategies you adopted previously and make them stronger, or do you believe the recovery offers you the chance to accomplish something totally different.  Define your goals in terms of customers, product/service lines, brand positioning, employee satisfaction, and profitability.  You’ll need to be clear on each of those to go to the next step.

The right jobs:  What infrastructure does your company need to accomplish the goals you developed from the last step?  If you’ve decided new products are the wave of the future, you may need to beef up your Research and Development department.  If you think customer service will be the brand differentiator for your company, your service and sales department may need to change.  If speed to market is critical, your order, manufacturing and shipping processes may need to be expanded.  Flow chart what needs to happen to achieve your goals, and then break those processes into functional jobs that make sense, utilize reasonable skills sets, and maintain adequate controls.  Research best practices in your industry to see how each job can be done most efficiently, and plan jobs to take advantage of those ideas.  (Visit www.kboptions.com if you need help with this step.)

The right people:  Once you’ve defined the jobs that need to be done, you need to give some thought to the kind of people who could best accomplish those jobs.  What skills, education and experience would they have?  What temperament or behavior style would make them best suited to that type of work?  How will you screen potential employees to see if they fit what you need?  In other words, will you know a good fit when you see it?  Get your selection process in place so that you can put the right people into the right jobs.  This applies to your current employees and any new ones you’ll bring on.  We want to plug people in where they can best succeed, not set them up to fail.  (Visit www.altmaninitiative.com if you need help with this step.)

The right number of people:  This may be the toughest question of all.  How many customer service reps do you need to handle 500 customers?  How many billing clerks do you need?  How many sales people will it take to reach your goals?  Determining the answer isn’t purely scientific, but some data can be used to help you with these decisions.  You can find that data in a number of places including your own historical records.  For instance, by using your accounting and payroll records, you can determine how many man-hours you spent to produce a certain outcome (invoices produced per clerk, clients brought in per sales person, etc.)  You can also pull information from your trade association on many of these data points.  Check the association’s website or call to ask if they compile such information and if you can gain access to it.

As always, you must use a little common sense.  Your company isn’t just like anyone else’s, and your way of doing things may require fewer or more people as a result.  But using this information can help you get a “ballpark” read on your staffing plan.

Now is a great time to start readying your company for recovery.  Position yourself and your company for success!

“Keywords” may be key to problems…

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I recently looked up “keywords” that business people searched most often in Google.  I was surprised at the words that didn’t land near the top.  Here are two that left me scratching my head:

Strategy – apparently not a lot of focus on strategy these days.  Maybe we’re all just hanging on, waiting for the recession to end — for real.  “How can you set a strategy when things are so uncertain,” I’ve heard people ask.  I guess my question would be “how can you NOT?”

Profit – now, I thought this was what kept businesses going, but maybe that’s just the CPA in me talking.  Maximizing profit is a key to long-term business success.  Whether it’s driven by increasing sales or decreasing expenses, the equation is one that requires attention–in every economic cycle. 

Two that DID hit the top of the list were “business loans”  and “cash flow.”  I understand that “cash is king,” but perhaps we need to spend more time and attention on the generators of cash (strategy and profit) so that we have more cash to manage.

One keyword that wasn’t a surprise at the top of the list was “business success.”  That’s what we all want, right?  At the Business Success Institute, we provide practical information to help you achieve that.  We also know the value of sharing with one another, and we hope that’s what will happen with this blog site.  Share your comments–we want to know what you’re thinking.