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TLS Continuum: Are You Bankrupt?

Trust me I am not trying to delve into your personal affairs. What I am asking is your organization in financial trouble? I am asking for a reason unrelated to a full investigation of your organization’s finances. I have had to cancel two training sessions in the past week due to the fact that the market served by the organizations was being confronted by layoffs because the oil prices are too low. I am much more concerned with how you view your human capital assets. Are you allowing them to demonstrate pride of ownership of your processes?

Here is a given rule of the TLS continuum; unless your organization is filing for Chapter 7 or Chapter 11 the TLS Continuum is not suggesting that you remove waste by cutting your overhead. What it is asking you to do is to review your organization and its processes and remove non-value added activities. If you do this you will tend to have excess human capital assets, so the question becomes what do you do with the excess?

Strategy #1: Layoffs

You can do what many corporations do. Call the human capital assets in to your office and take the chance that you are making a mistake and say we are sorry but we don’t need you anymore. So as they exit so does the corporate knowledge bank. So do the skills and abilities that have served your organization well. You are cutting numbers for the mistaken belief that this is the way you reduce overhead. Unless you are in dire financial trouble, continuous process improvement is not the reason to trim overhead through staff reduction.

So what do you do?

Strategy#2: Retrain

Look at your organization, Are every operation of the organization fully staffed? If not why not take the excess human capital assets and retrain them to fill other vacancies within your organization. You practice resource allocation in other areas of the organization why not do it with your human capital assets. Toyota has shown us the power of hiring on skills not job positions. Do the same for your organization.

Strategy#3: Educate

Identify the skills missing in your organization and help the human capital assets go back to school and get new knowledge in a different area of the organization that might resolve both your problems and theirs. You know the skills you need why not help someone to obtain those skills. Training can be less expensive than the cost of paying unemployment and finding a replacement later down the road.

So I take you back to my initial question, are you bankrupt? If not there is no excuse for lowering your headcount in order that you can maintain the return to the shareholders. What about the stakeholders, who are more important to the organization in the long run? Bottom line is that unless you can answer yes to the opening question there is no reason why you need to reduce your headcount. Be honest with yourself and the organization, can’t you use the soon to be departed skill somewhere else in the organization?

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