The golden triangle – focus on people as recession looms
The three underpinning principles of business, known as the Golden Triangle; marketing & sales, cash control and the staffing, should always be at the forefront of a business owners mind, but when times are good, as they have been, complacency sets in. But now as a recession looms, I urge you to review the three golden principles. The anticipated sales pipeline is the raw data for deciding what to do with your business and it is fundamental that you understand what will happen to your portfolio of work. Having decided what the likely income will be, costs will have to be adjusted to ensure cash is not consumed unnecessarily. One of the largest costs in a business is staff and an element of restructuring of the organisation will probably have to occur.
Start by reviewing the organisation structure. Ignore who you have and design a structure for the future anticipated workload and the ways of working. This recession is unlike previous recessions because it is health based and there has been an opportunity to test, in anger for a long period, working from home. It has also enabled businesses to experience the impact of people working more flexibly as they have had to work around childcare, shielding and caring for others outside their bubble. The radical changes imposed have been an opportunity to experience a variety of issues, as everyone was in the same situation, and it has provided the opportunity to ascertain if the cost base could be lowered. For example, using rotas and working from home 3 days a week suggests office space could be reduced and salaries, which include a large element for commuting, lowered.
The potential client base may have changed due to the pandemic, so departments focused on, say supplying or providing services to the hospitality sector will be reduced, others increased. The new organisation chart, including how they will be employed and where they will be required to work, will provide the basis for who is required. From this it can be determined which staff will be retained, retrained, or released as the new structure is populated with the most appropriate people. If certain departments are to grow, there may also be a need to bring in new recruits if there is not time to retrain staff.
Business owners, by their nature are more entrepreneurial. They are more willing to accept risk. However, employees are less willing to take the same degree of risk. Employees prefer certainty and are motivated as their needs are satisfied. Having clarity with the organisation structure and unambiguous job descriptions is the foundation of any reorganisation and future performance management of the staff in the business. As tough as it is, make the cuts in staff which are required as quickly and as deeply as you can. It is best done once, so everyone can regroup and move on. Customers, clients, and the staff who remain should be made aware of how it protects the business in the future and the service which you provide. Doing multiple cuts is like a death by a thousand cuts, and merely unsettles staff, who will leave if another opportunity arises, or become demotivated, by the lack of management clarity.
Staff make up a considerable element of most businesses’ costs. They will be engaged when they are able to perform their work efficiently and in harmony with their colleagues. The lockdown has provided a uniting cause for everyone to rally around. As we move to the new normal business owners, and management, should provide a new cause for the staff to engage with, but for them to be engaged modifications to working habits are likely to have to occur. The sooner the business is reshaped around the new normal the better.
If you would like an outside party to challenge your thinking on the new normal as the furlough support is wound up please contact me to for a confidential discussion.
More about the author https://www.linkedin.com/in/peter-searle-a75a993/
Other blogs in the Golden Triangle series: