Re: Tuesday's news: cost-cutting measures

[Andrew Plato <gilliankitty -at- yahoo -dot- com>]

--- eric -dot- dunn -at- ca -dot- transport -dot- bombardier -dot- com wrote:
> 
> I agree completely with the analogy you give. But that isn't the situation
> under
> discussion is it? 

Okay - agreed.

> To discuss the case Jane is faced with:
> 
> If money was tight and the homeowner approached each kid separately and asked
> for cost cutting measurements my response would be as follows: "What's the
> other kid offering?". 

That's like asking a Ford dealership to tell you what the Chevy dealership is
offering. Thats not the way it works. You don't get to hear all sides of the
equation. You have to offer up YOUR best deal. 

> If I was the second kid, perhaps I would be astute enough to
> suggest firing the first kid and that I would pick up my pace a little. Or, for
> an increase equal to half of what the other kid was making do the work of two.
> But, if the homeowner just bought a brand new SUV and sent their kids off to
> some expensive camp/vacation and then came to me and said things were tight,
> how can you cut costs. I think I'd tell them to stuff it as cutting my minimum
> wage job certainly isn't where the belt needs tightened.

That's YOUR perception. Just because you see a new SUV and camp you're assuming
you understand the entire family's financial situation. That might not be the
case. How do you know the family's previous car didn't explode and they needed
something new. How do you know the family didn't make a tough decision that such
camps are actually very valuable to their children.

The point is, when cost cutting comes down, its not your job to analyze the
company as a whole and make your assessment of the situation - unless your a
financial analyst for the company. The organization has - for whatever reason -
decided that there will be cost cutting in YOUR AREA. Most of the time that boils
down to, "we don't want to spend as much for this aspect of the business." 

For example, a company may decide that attending an expensive seminar in Las
Vegas is very good for the firm since it has the potential to hook them up with
customers. But the flip side is they decide to cut a technical support guy to
afford this. Is it fair that the executives get to go to Las Vegas when the tech
support guy gets the boot? 

To the tech support guy, it seems terribly unfair. But to the business as whole,
its a very sound decision. Its pointless to have extra capability in an area if
you don't have the business to support it. And when times are tight, its very
logical for a company to slash capability in favor of sales.  

Executives attending a seminar has a much greater chance of bringing in sales
then a tech support guy developing processes. Likewise, an executive with
extensive industry contacts has much more potential to bring in more business
than a technical writer developing single-source systems. 

Such is the eternal tension between "potential" and "capability" within any
organization. There are people who "drive" the company and connect it to the
outside world bringing in sales and business (potential), and then there are
those that "do" the work and fulfill plans (capability). 

Its a lot easier to scale up capability than it is to scale up potential.
However, the reverse of this is not true. Its CONSIDERABLY easier to kill off
your organization's potential than it is to wipe out capability. A single lost
executive can wipe out a company's entire potential as a viable business. But a
single lost writer will likely have a negigible effect on the business as a
whole. 

You can always hire another writer. You cannot just "hire" a customer base.
Potential must be built carefully over a long period. Whereas capability can be
ramped up rather quickly. This is why we have contractors in the world. 

Many businesses built entire empires on selling things they don't quite have yet.
Microsoft basically made itself off a deal with IBM, when they didn't even OWN
the operating system they sold IBM. You might consider that an abomination, but I
have news for you - that's the way business works. If companies truly had all the
capability they claim to have in their marketing and sales brochures, 99% of the
products you buy would cost considerably more. The pressure to keep things
inexpensive and mass produce has a fascinating effect on how organizations must
manage and control resources. 

The businesses that succeeded, scaled up capability quickly when it was needed
and fulfilled their promises. The companies that bomb are those that make
promises and don't fulfill them. 

If you have a job where you are essentially "capability" to a firm, you are
always at risk. Generally, companies will slash their capability FIRST before
slashing sales or executives. That's the nature of business. 

So before you start attributing "blame" realize that cost cutting and business
finance is a lot more complex than "how dare those scum bags fire me!" 

> If asked to cut costs in the corporate world, I think the first question to be
> asked is "What's the company strategy?".

And that would be a good question to ask. Because your answer should be based on
that strategy. If you can demonstrate a mechanism that your position can offer
more potential sales to the business, they might reconsider cutting back. The
problem is that tech writing - like most support positions - is not seen as a
profit center. Its seen as a cost of doing business. And you're going to have a
hard time convincing business executives otherwise. 

Therefore, were I asked to cut costs, I would think about what it is I can do to
make my position either less expensive and/or more valuable. 

Andrew Plato 

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