Life sometimes offers an opportunity to observe internal Corporate dynamics in the raw. This is never more prominent than when the growth curve of any organisation is inverted downwards.

I’ve always found that bigger gains are made in my understanding of life when all around is fraught emotionally and outwardly challenging. Such an opportunity to observe and learn has presented itself recently.

I’m aware of an organisation that is cash strapped and as such is going through a process of cost reduction. The strategy of cost reduction has focussed principally on the lowering of staffing levels. This is understandable given that staffing costs make up a major share of any organisational budget. However on observation the business is at least paying lip service to the need to provide the same service density to their Customers. As an aside I’m reminded of the public response to polls relating to what voters want Governments to provide. Unreasonably Joe or Joanne Public expect lower taxes and higher Public Social provision in general terms. The example in focus here is seeking to reconcile reduced budgets and resources with higher expectations regarding business deliverables. Managerially system inputs are reducing, the same processes are still in play and yet the outputs are expected to remain the same or increase. This doesn’t make much sense to me.

There are three ways to accommodate the reduction in the input stream:

1. Introduce efficiency gains and thereby drive down costs.
2. Reduce Customer deliverables in relation to ‘widget’ complexity and variability.
3. Reduce Customer Service Levels.

The first option above acts on the processes within the business system and the last two focus their attention on the business output stream.

The Short Term Observable Trends

In the absence of enlightened management the ‘lunatics take over the asylum’ and form coping strategies. These range as follows:

1. Altruism or Entrenchment – Individual teams focus inwardly and just do the work that they solely benefit from and are measured by. Doing work for those in other teams, where there is no tangible gain for your own team, becomes a luxury that individual team members are loath to service.
2. Communication – As a consequence of inward looking teams inter team communication is adversely affected. It can be seen that communications by email have increased and generally requests are being ignored. The businesses staff are employing coping strategies one of which is to prioritise communication responses as ignore for now and hope the problem goes away, respond and hope to contain or finally to say no to any request. The latter option is not much adopted in my experience.
3. Nudging – When an individual has too many work streams they nudge each one in turn in order to keep them all moving. The more work streams there are the less that comes out the sausage machine at the other end of the work flow and consequently business efficiency reduces.
4. Navel Gazing – More effort is expended on the use of reporting suites and Customer Surveys that provide an illusion of success. This evidence is not entirely convincing against the backdrop of anecdotal references.

Those leaders that in less harsh business climates built ivory towers are apt to miss the obvious business trauma tipping points. History is strewn with leaders who missed the signals and became the vanquished.