Definition of Insanity

Business, it seems is the art of doing something over and over again and expecting different results. We are all insane. Right now, everyone is cutting costs - layoffs and staff adjustments abound. Unfortunately, unless there is a fundamental change in process, productivity will drop. Fewer people will do less work than more people, presumably, unless they go about it in a fundamentally different way.

One thing we know about process change is that it is expensive. No one wants to buy new tools, or revamp old ways of doing things, because there is time expense or capital expense, and besides the old way was successful once, right? Only a fool would lay out cash to re-engineer a process in the middle of a weak market, right? Wrong.

Here's the insanity. If you trim staff and resources during a downturn, to adjust for low order volume, you will greatly hinder your chances of ever coming back. You will be out the cost of the turnover (severance, unemployment, recruiting, training), before you can take one step beyond your low order level. By trimming staff, you effectively say, "we are at this low level until further notice." Inertia inevitably sets in and you become accustomed to the lower volume of business and the smaller staff size.

The BEST thing to do at times like this is take the staff you would lay off, and put them on a task force and require them to revamp and retool processes, and then train the rest of the team. Give them solid benchmarks and goals, constantly measure KPIs and use metrics that actually matter. That way, you are not out the cost of the turnover, you can accomodate growth, and when the growth eventually does happen, you can handle it even more efficiently than before the downturn.

Instead, as we see all over America, companies are not making themselves better, they are just making themselves weaker.