The Fine Line Between Reducing Costs And Increasing Quality

By Gaia Grant

Future directions

The current worldwide political, social and economic reality has forced us all to stop and think seriously about future directions. Organizations, as well as individuals, are bracing themselves to face challenging times ahead. In a bid to deal with an increasingly competitive market and ward off impending financial strain, companies will be asking even more of their employees. The drive to increase quality at the same time as reducing costs will become much stronger. Most organizations know the consequences of not being able to keep up. The economic recession is biting hard. But the ongoing question will need to be: is this just a passing downturn, or is it the new reality of globalisation going to continue to put pressure on organizations. Companies must now perform and compete on a world stage where local issues and internal politics are no longer an excuse for poor performance. Ultimately this means finding ways to reduce costs and increasing quality. In our consultations with clients, most mention this need as a bottom line issue.

Seeing the needs

At first consideration it’s easy to make the assumption that this demand is contradictory. There is, however, a simple all-encompassing solution: efficiency. The need to reduce costs and increase quality does not need to be simply empty rhetoric handed down by senior management. There can be practical, workable solutions to increase efficiency within individuals and organizations. So what does it mean to become efficient? Unfortunately most people take a very simple approach to this. For many, efficiency is simply looking at a spreadsheet and slashing through it. Downsizing appears to be the simple solution for decreasing costs, but the resulting low morale can create further problems with high turnover. The cost of a senior staff member leaving a company has been estimated at anywhere btw $25000 and $50000 plus and up to four years retraining. The other effect can be burnout of important staff.

Slash and Burn

The “slash and burn” approach to dealing with economic concerns completely ignores the human factor. The issue of cost cutting is dealt with while ways of increasing quality are ignored. Naturally in times like these companies need to cut costs, but they must be careful that it doesn’t affect the other important part of the equation – quality. Quality comes not just from efficient systems, but also from people within the organisation working to their full potential both individually and also as groups. Cut out too much from the human side and morale will plummet, and soon behind this quality will fall. A recent survey has found that 25% of people’s time at work is wasted, 4 out of 9 people are not able to cooperate with each other, and over 50% of employees find their work overwhelming. With the current situation most employees will face more pressure to perform, and if they are not given the skills to cope, then these statistics may only get worse. This is the time to realise the importance of managing people to a point where they can perform to their absolute best – without the undue stress. But managing people wisely is different to just pushing them. Pushing people too far leads to burnout and ultimately low productivity.  Good management increases personal satisfaction and corporate success.

Fulfilling the needs

Individuals and small teams need the opportunity to sit down with a facilitator to work through ideas on how to combine their talents to work together efficiently. They need to learn how to maximise on strengths and minimise weaknesses. To discover ideal working environments. They need to be able to sort through the array of management models to see which one works best for them in their situation. Six months ago we ran a program for a new project team of 30 people from one of the world’s largest  international banks. Their work was stressful, and if they hadn’t learnt to work together effectively the expenses would have been enormous. Within a two day period we were able to help this project group sort through personality and leadership issues to prepare them for their project. They had the chance to process and discuss the new information it in a safe context. The real test came at the end of the project. The team leader’s comment below is an indication of the importance of this joint learning opportunity. “For the last six months since your course it has been pretty smooth sailing in terms of project work. I haven't had to handle any emotional issues or conflicts within the group, which is pretty amazing. This certainly had never happened for the previous 2 years, and on top of that, we have been meeting deadlines for projects are that directly within our control - everyone is much more cooperative, displays fantastic teamwork, commitment and understanding.  The outcome is certainly very impressive.” Project Manager International Bank © Gaia Grant
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