Browsing through the headlines of today’s issue of the Wall Street Journal, one can see how companies of all sizes struggle to kept afloat amid the current crisis. Most companies feel the effects of the crisis directly or indirectly and have defaulted to crisis management.
Cost cutting by numbers
Traditional crisis management is often a numbers’ game, where CFOs and number crunchers excel. The company head count is often found among the many items in the Excel sheet, and subject for a percentage change. The default approach is often to close entire sites or execute companywide layoffs throughout all departments, which can result in disruptions to the company productivity and surviving employees left with Post Layoff Distress Syndrome, PLDS; a new term born during this crisis.
By cost cutting through a numbers the company runs the risk of loosing key employees as the cost cutting also hits the well performing teams and departments, or invaluable knowledge. Knowledge that is both expensive and difficult to regain or build up.
Cost cutting through insight
There is however another, more insightful way to execute the layoffs. Partnering with the HR department and the methodology of Organizational Network Analysis, the crisis management team can obtain innovative insight into the inner workings and dynamics of the organization. This insight will permit the team of either validating a thesis of which sites, departments, or offices to shut down, or identifying informal clusters within the organizational matrix that would be hash hit by layoffs.
By cost cutting through insight the company leverages dynamics of the information organization to remain agile and resilient in times of crisis, because of the objectivity of the Organizational Network Analysis methodology.
Default reaction to crisis is crisis management and often cost cutting, when a more suitable reaction would transformation management. An added benefit from the using organizational insights when executing cost cutting initiatives is that the results can be used in transformation management. It is possible to identify change agents and resistors and their impact on the organization.