The COVID-19 pandemic and its aftermath have created a whole new world of challenges for employers. Many companies are facing the necessity of cost-cutting and the inevitability of reducing their workforce.
A recent article in Harvard Business Review suggests an alternative approach to cost-cutting, rather than the typical top-down approach. Authors Patrick Daoust and Paul Simon suggest that leaders turn to their employees to gain insightful data before making any reorganization-related decisions. Daoust and Simon recommend first getting a clear understanding of initiatives and projects currently underway within the organization, and then begin determining the value of those in relation to achieving the organization’s most recent objectives.
Daoust and Simon have found that this “bottom-up” approach has helped leaders to significantly cut costs and realize their goals more quickly. This is because using the “bottom-up” approach motivates employees to contribute. And this makes sense – who better to suggest improvements than the people who are performing or supervising the work?
So, how do you know what kind of data you need to collect? The authors suggest focusing on four types of information:
“Key Routines and Projects”
Asking employees who are in leadership positions to make a list of 20-30 projects and routines is a good place to start. Gathering and closely examining this data will help to spot redundancy as well as ineffective procedures or elements of routines.
“Effort Required”
Once the fundamental routines and projects of the organization are determined, the next step is to understand how much effort is required in executing these fundamentals. This information will help leaders determine areas where more or less support is needed. The pandemic may have significantly changed the amount of support needed in some areas of the organization, and this is the time to make those adjustments.
“Strategic Priorities”
The next step advised by the authors is for the managers and employees to sort the previously identified projects and routines into 3 categories, “core,” “context,” and “cease”:
Core: These are the projects and routines that are considered as the company’s top priorities and that fundamentally differentiate the company from its competition.
Context: Context projects and routines are those that may be optimized for efficiency, often through automation or sharing of the workload
Cease: Projects and routines that are no longer relevant or are not adding enough overall value to justify their continuation.
“New Operating Model Ideas”
The fourth and final step is to continue involving managers and employees to work together to suggest and implement change. With all of the data collected in steps 1-3, and all of the different perspectives and suggestions of employees and managers, leaders will be able to make much more informed and ambitious changes to the organization.
Daoust and Simon advise that, by engaging employees and managers in the decision-making process, leadership will be able to not only cut costs, but also significantly redesign the organization. The added benefit of employees feeling appreciated and included as part of the process can also improve morale, especially in these uncertain times.
You can read the entire article here.
