Financial pressures are pushing businesses into tough decisions, says Patricia Wheatley-Burt of HR consultancy Trafalgar. 

Several years ago a young mountaineer called Aron Ralston found himself trapped with his arm under a rock in a remote place. After five days, he decided that if he did not free himself, he would most likely die. Using his pocketknife, he amputated his arm below the elbow, put on a tourniquet and administered first aid. He then rigged anchors and fixed a rope to rappel to the floor of the Blue John Canyon. It’s impossible to imagine how he felt making this decision, but he had to weigh the balance between the risk of losing part of his arm and the reward of surviving or dying.

The recession has trapped many organisations in difficult financial situations, but should they ‘amputate’ their limbs by off certain departments, or could they put the whole business on a ‘diet’ by reducing salaries and benefits across the board?

Take courage in your decisions
Understanding what makes the business work is one of the hardest lessons any leader can learn. Inherent to this is an understanding of the risk and reward balance, so that any action taken will enable the organisation to survive and be fit in the long term.

Management boards and executive teams are now having to make decisions that determine whether their businesses live or die. They need to balance what they can trade without, perhaps by looking at where they have built up unnecessary or ineffectual staff, or if they currently use inefficient external agencies, take the decision to terminate them and eliminate their costs.

This involves redressing poor decisions of the past, acknowledging them and taking responsibility for those actions. Smart executive teams are those who understand that while their selection of people may have been poor or badly managed, the need for those ‘limbs’ remains essential.

Buyer beware
Any internal or external resource supporting the business needs to be familiar with and part of the wider ‘family’ of the company. Randomly bringing in additional support without proper induction, training and imbuing people with the culture and values of the firm will recreate the ineffective carbuncles of the past.

When hiring ad-hoc or interim staff, it’s essential to ensure that you’re not just getting a cheap resource who will take a long time learning their skill at the organisation’s expense. Management teams should use this time as an opportunity to revisit their organisational structure and identify which functions are essential and which can operate on an ad-hoc basis.

Organisations and employees alike need to be capable of putting themselves on a sustainable ‘diet’– or risk being ‘amputated’ from the market themselves.

Patricia Wheatley Burt (FCIPD)
Principal Consultant
Trafalgar – The People Business
www.trafalgarpeople.com [1]