When is a gain recognized in consolidating financial information
After dealing with your less-than-busy employees, you’ll need to take the personnel action you have most likely been avoiding for a while: terminating the underperformers. The manager knows their work hasn’t been satisfactory but feels uncomfortable about firing them—usually for entirely understandable reasons, such as kindness (“Mary’s personal situation is so difficult right now”) or unpleasantness (“The rest of the department will be upset if we let Bill go”). In two more years, you may not be able to protect them any longer.They will be two years older, which may make it harder for them to get comparable positions elsewhere. Some managers fail to address these problems because of perceived procedural barriers (“HR says we have to document Fred’s underperformance and go through a probationary period—it’s just too much hassle”). We once worked with a company that had given 94% of all midlevel managers the highest rating on its scale during its most recent evaluation period.
Next, compare this with the burden that your leanest competitor’s product bears. Overhead that increases the effectiveness of your direct activities should be evaluated against a strict cost/benefit standard.No, you have to do this the hard way: one item at a time and in short order. Over the past 30 years, we have worked in, led, or provided consulting assistance to numerous organizations in this situation—including manufacturing companies, financial institutions, professional-services firms, high-tech start-ups, utilities, and universities.Our experience shows that administrative cost-reduction opportunities follow similar patterns virtually everywhere. Unless cost cutting is new to the company, you’ve already done away with most discretionary, comfort, and non-mission-critical perks and activities, such as holiday parties, event tickets, and tuition reimbursement.We discovered that the officers devoted their freed-up time to better serving existing customers and reading up on new products—but not to phoning customers and selling (which they enjoyed least).We taught the bank to offer branch managers a choice each time it implemented a labor-saving innovation: either combine jobs and reduce head count or raise the branch’s sales goals by a commensurate amount.Redesign or reorganization ideas often eliminate the lowest-value activities, with moderate impact on other departments, and can help cut expenses by up to 20%. The second type includes employees who do both unpleasant but valuable tasks and pleasant but less valuable ones.
Cross-department and program-elimination ideas are usually necessary when you’re aiming for 30% or more, but they have the greatest potential to be organizationally disruptive. Any efficiency gains in the former part of their job tend to get offset by excessive focus on the latter.
Because the job requirements were new, past HR ratings did not matter.
He created a process to ensure that the people best qualified for the new jobs got them; the others were released.
We are privileged to be able to offer this exceptional mix of seasoned financial, technical and bilingual talent.
You’ve been ordered to reduce your department’s costs by 10%, 20%, or 30%. First, don’t expect to reach your target with a single big idea. Second, match the kinds of opportunities you examine and implement to the degree of cost reduction required.
(If such an idea existed, it would most likely entail so much risk that the organization would never be willing to implement it.) Instead, you should plan to reach your goal with a combination of 10 or more actions. That’s true even for those that have been through previous rounds of cost reduction.