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Cutting the crap

06/02/2010

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Following the election of the ConDem coalition here there has been a huge amount of talk about efficiency savings….there is even an “Emergency Budget” (think Accountant on-call) to set out the efficiency savings that are going to save us from doing an impersonation of  Greece (without Rizzo and Frenchy).

The term efficiency saving is not unfamiliar in business.  I’ve probably used it more than a couple of times myself.  Times are tough we need to find efficiency savings etc. etc.  The thing that struck me this weekend though was the realisation that the phrase in itself is in most case just PR spin and twaddle.  What we are talking about are cuts.  Sounds less appealing don’t you think?

Let’s take a definition of efficiency,

The ratio of the effective or useful output to the total input in any system.

And this is where the problem lies.  In most cases we are talking about the “useful output” falling.  When we reduce headcount or restructure, sometimes I admit we are genuinely looking for  efficiency savings but sometimes as well we are just looking to cut costs.  And similarly on a Macro economic level we are often talking about cuts….you don’t take £6bn out of Public Services and expect them to perform at the same level.

It is sadly too much to suggest that our politicians are open and honest with us, but organizationally we can lead the way.  If you are talking cost out then tell people, believe it or not they will understand.  We’ve all had to do it as families at one time or another.  Not going on holiday was not an efficiency saving…… Sure it may seem unpalatable but at least if we are open and honest we can shed some of the distrust that surrounds the HR profession.

“Guys, times are tough.  We need to make some cuts to ensure that we can survive.”

Now that wasn’t so hard. Was it?

11 Comments leave one →
  1. 06/02/2010 08:48

    Sir

    Very good post!

    I’d like to note, though, that the emergency budget actually hasn’t taken place yet – it’s scheduled for Tuesday 22 June.

    It’s very likely that the initial £6 billion worth of public spending cuts announced just over a fortnight ago will represent only an overture prior to the full extent of austerity measures that will be enacted over the opening years of this parliament. The economist David Blanchflower last week set out his own view on the likely impact on output (in terms of GDP) of the initial £6 billion cuts to input (public spending). It will be “interesting” (to say the least) to see if Mr Blanchflower’s typically sunny (but often accurate) take on things proves correct.

    Kind regards

    Michael

    • 06/02/2010 08:56

      You are of course correct. In my haste I entered the future. It should of course read “there is even an Emergency Budget…” If you’d like a job as an editor please contact me!

      I have now amended the post.

  2. Abi Signorelli permalink
    06/02/2010 09:06

    Having worked in internal comms for many years, through thick and thin, i’ve a lot of experience of “cost efficiencies”. The phrase has always driven me nuts and I’ve had many a battle with various execs about using something more up front, honest and transparent.

    Sadly, with massive pressure from PR and Investor Relations teams, invariably I lost the battle.

    Totally bonkers in my view – a view that I knew was supported by many employees. Sadly it resulted in many of them feeling bullshitted – and, yes, invariably, the messenger was well and truly shot.

  3. BJH permalink
    06/02/2010 10:23

    Unfortunately, my previous employer did expect to reduce costs and still have the same level of performance. There was a sense that those of us not made redundant should be so grateful to have retained our jobs that we wouldn’t mind working excessive hours to unrealistic deadlines to deliver all the stuff that the people who had been made redundant used to do.

    Luckily for me, I became included in the cost cutting exercise and my role was declared redundant. There are now five people trying to do my job, on top of a role that was already very much full-time.

    I now have a job that I love, that challenges me, and I still get to have a life without stress that I’ve left a million things undone at the office!

  4. The Engaging Engager permalink
    06/02/2010 20:30

    Over 170 civil servants earning more than the PM!!!
    Gordon Brown blubbering on about the need for “fiscal stimulus” and failing to explain the difference between printing money and spending it on quangos etc.
    Former government minsisters spending everything in the last few days of power and leaving piss taking notes! Grow up you Neroes!
    I don’t give a flying f*$£ whether the financial measures are called efficiency savings, cuts, or “milk snatching”! It’s got to happen and fast!
    Take your point about the difference between political double speak and organisational spin and bullshit though Abi. It’ shit being an internal change agent….fuck them! Leave and write poetry for a few years – we’re all buggered ……

  5. 06/03/2010 08:17

    @Michael Carty – Let’s just say that I’ve seen the future. And there is no CIPD……

    @Abi Signorelli – I just wonder when people will start to realise that everyone knows this is a farce? Employees are not idiots.

    @BJH – Sounds like you’ve landed on your feet. Sometimes good can come out of what initially seems bad.

    @The Engaging Engineer – 1) not sure I agree with you that it needs to happen fast 2) the milk snatcher of course used the cuts to fund tax reductions for the wealthy 3) relax……

  6. Mohan permalink
    06/03/2010 09:04

    Hi!

    Not so sure they need to happen quickly either – cut in haste, repent at leisure…as BJH points out cuts can often do more harm than good and the recovery, such as it is, remains fragile.

    On the point about language, the trouble with being upfront & honest is that when you say “We need to lose a few people for the business to survive”, most people say “Great idea – as long as its not my job!”
    It’s harder to take that standpoint when talking about efficiencies, and you also raise the possibility of staff suggesting ways of saving money that the Board might not have thought of.

  7. 06/04/2010 08:08

    @Mohan – Welcome and thanks for commenting. Your point is well made where you are genuinely looking for efficiencies. I guess my concern is the over use when ultimately we are just talking about reducing spend and reducing service. Sometimes to get efficiency you need to invest. And that brings us back to the point on the speed of making cuts I guess……

  8. 06/12/2010 18:15

    I think that being open and honest is essential to maintaining a great workplace — when management tries to “spin” the truth, employees almost always know and the employment relationship can be damaged beyond repair. Once trust is lost, it is very difficult to regain it (if not impossible). When employers have earned their employees’ trust, the stress of rumors and paranoia can be prevented. As an added plus, in the open-and-honest type of environment, employees may come up with better ideas for increasing efficiency and lowering cost while still maintaining great service and production.

  9. 06/15/2010 09:18

    @Jim – Welcome and thanks for taking the time to comment. Absolutely agree. Surely it is better to engage people than to keep them in the dark?

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