Are we losing the babies with the bath-water?

Anant Rangaswami, 13 February, 2009

Mumbai

Let’s face it, there’s a lot of cleaning up happening in adland and in media houses.

Some irritate but don’t depress. Stuff like switching off the air-conditioning early, like doing New-Delhi to Mumbai or Mumbai to Bangalore same day trips to save on the hotel accommodation costs, and so on.

Some of the moves irritate, worry and upset. Like people losing their jobs.

In most instances, I maintain, it’s not pink-slipping; it’s organizations setting their houses in order.

Have they, in the heady days of 20% year on year growth, recruited more people than were actually required?

Have they, in the euphoria of high profits, given the slackers more rope than they can now afford to?

That’s the tough job: finding the answers to these questions.

Once the answers are found, the process of

a)      figuring out real requirements

b)      figuring out who is dispensable

begins in earnest.

And, in this process, some mistakes will be made – and are being made.

Because there’s another very important issue that needs to be resolved: the way the right-sizing or downsizing or pink-slipping, whatever nomenclature one chooses, is communicated to the stakeholders: employees, suppliers, customers and media.

All cost-cutting or cost-rationalisation needs to bear in mind that the very news of such an act will send conflicting messages to stakeholders.

If not communicated correctly, an employee who has escaped the axe might worry about being on the next list – even if no such list is contemplated. The resultant is that he, who is considered useful to the organization by the management, might immediately start looking at options.

Similarly, suppliers might interpret the cost-cutting as an indication that the company is in trouble, while in truth the changes might make the company stronger than it has ever been.

Customers, too, might see the changes as indicators that the company is in trouble – and might decide to go elsewhere with custom – and cash – that ought to have come to you.

There is one more serious issue to consider.

Not too long ago, the shortage of talent combined with the retention of talent were the largest concerns for CEOs in adland and media houses.

Has so much changed in six months?

If the dynamics have changed so much in six months, justifying the reorgainsation and the pink slips, let me provoke you here: can it change again, just as much, in another six months, and you, who have chosen to get rid of some of your executives, would be scrambling to find much-needed talent?

You would probably find them, too.

Except it would be at prices you won’t be too comfortable with.

Perhaps it would be sensible to take a deep breath at this moment and figure out every single cost that can be pared or done away with – without touching your people, except for those who are parasites on the system.

Next, tell all your stakeholders exactly what you are doing and exactly why you are doing what you are doing.

Including stakeholders in your decision makes them more confident about the company, and the future of the company’s prospects and helps in extending the life of your relationship with them.

Play all your cards close to the chest and it could cause them to read your cards in a manner that all the players, including you, could lose.

It is sensible, at a time like this, to throw out the bath-water. Just ensure that the babies are not being thrown out with it.