While fiscal commentators continue to debate how long and how steep the current economic downturn might be the rest of us have to get on with our lives. However as managers we need to be realistic and with operating costs so closely linked to oil prices it would be prudent to sharpen that proverbial pencil and look at the budget; one more time. Delay at your peril. Having had the luxury of time to consider your options and their implications is far better than being given no time at all.
The biscuits disappeared from meeting rooms a long time ago. This had little impact on the bottom line but it did sent a powerful message to the organisation that attitudes to spending were about to change.
Now attitudes to spending depend a lot on whether an organisation believes it has its costs under control or not. I say ‘believes’ because perception is everything.
The organisation that believes it has its costs under control will target areas of low return on investment (ROI). It might also look at how it can allocate costs more effectively. This might result in the physical reassignment of a resource and its associated cost or just reassigning the resource’s cost centre responsibility. Internal processes are reviewed, spreadsheets abound and change is glacially slow as executives try to capitalise on existing capabilities and strengths. And as they do this they just might start to take their eyes off the competition.
The organisation, who believes it doesn’t have its costs under control or worse, doesn’t trust its people to report costs accurately, is an organisation akin to a rabbit caught in the headlights of a car; you cannot be sure which way it will jump. This is the organisation that brings in consultants to carry out ‘cost studies’ whilst taking knee-jerk decisions in an attempt to appease it’s disgruntled shareholders. Trying to stay ahead of competitors causes change to erupt all over the place with little or no understanding as to whether the internal organisation can cope with the result. The budgets of functional departments that look after common process and span many operational business units are most at risk. Why should these operational units, who are also being asked to cut costs, pay for services that they feel do nothing but obstruct and delay day to day business?
As a manager it’s worth knowing enough about your organisation to evaluate where it sits on the ‘Richter scale’ of cost control; between grinding to a halt and the heading toward implosion? For a manager to succeed or perhaps it would be more appropriate to say survive within their organisation as the economic downturn takes hold will very much depend on management style.
Most of us can be flexible, to a point, but under stress we will all revert to the style of management we are most at home with. There are many tools on the market to help in this area; MBTI1, Mental Toughness2, DISC3 to name a few. If your preferential management style is not compatible with that of your organisation’s decision makers then knowing this might make all the difference to your energy levels, performance and most importantly your overall wellbeing in the testing times that lay ahead.
Notes
1. MBTI (Myers Briggs Type Identifier) is a psychometric questionnaire designed to identify certain psychological differences according to the typological theories of Carl Gustav Jung. For more information: www.myersbriggs.org
2. Mental Toughness has been developed by Dr Peter Clough, Head of Psychology at Hull University. Mental Toughness is a key aspect of performance in the workplace as it measures how a person deals with stressors, pressure and with challenge. For more information: www.aqr.co.uk
3. DISC is the four quadrant behavioral model based on the work of William Moulton Marston Ph.D. (1893 - 1947) to examine the behavior of individuals in their environment or within a specific situation. DISC looks at behavioral styles and behavioral preferences. For more information: www.human-capital-development.co.uk/ppi-personality-performance-indicator.htm
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