The saying goes “anybody could do it with more money and more people”. I assert that the other extreme is that “anybody can run an anorexic organization and admire short term results”. Of course, the optimal organizational structure lies somewhere in between. Running lean means eliminating waste but keeping enough of an organization in place to run the company well while having sufficient bandwidth to act as the company’s shock absorbers.
Before I get into this, let me assure you that I am not advocating waste. There is a big difference between running lean and still having sufficient bandwidth for growth, continuous improvement, and innovation and cutting to the bone to some perceived benchmark status. If your operation:
Leadership teams that ignore these realities step over dollars to save dimes. They save relatively small amounts on resources but pay the high costs of crisis recovery that the resources could’ve prevented.
On the plant floor, there is an optimal staffing for a given work content with trade offs between manual labor and automation. In a well run operation the work is, by definition, repetitive. There is an optimal number of process steps. There is an ergonomic plant layout that minimizes wasted effort from operators. Cutting too deep is evident when the operators don’t have sufficient time to perform all of the steps. Operations and Finance are very good at defining and achieving the optimal condition.
It is tempting to apply the same approach to staffing the “front office”. For the parts of the business that are, like Operations, repetitive, it’s possible define an optimal staffing level. Just because you can define it, doesn’t mean you can immediately achieve it. Process implementation and validation, overcoming politics, and having a leadership team that is primarily committed to each other are all required before the whole operation will function in a benchmark way. In short, suboptimal conditions in parts of the organization will require suboptimal staffing. That only addresses the repetitive portion of the company.
What's next are resource needs that are beyond the repetitive tasks in the office. Continuous improvement and new business acquisition are examples of activities that can drive the need to carry “extra resources” to provide bandwidth to accomplish that work.
There is another non-standard condition that drives the need for “extra resources”: the turnaround. If there is a department that is in a constant state of crisis and affects the rest of the organization, the focus has to be on stabilizing. Savings through stability is a starting point that often comes from covering the challenged area with resources like a blanket. Stability buys the space to install and prove out the processes that will ultimately drive the opportunity to target benchmark staffing. Attempting to jump directly to benchmark staffing in a department in need of a turnaround will result in crises, expensive recovery and employee turnover due to people getting burned out.
There is no doubt that any competent leadership team will seek to reduce costs by eliminating waste. However, blindly doing so without considering the need for micro-turnarounds; bandwidth to achieve objectives beyond steady state; savings through stability; required flexibility for non-repetitive roles and a buffer to provide shock absorbers that protect employees, financial results and customers from the effects of chaos ignores the necessity for a credible plan to achieve the objectives of the organization.
Shock absorbers don’t stop vehicles from hitting bumps. They isolate the occupants from the true impact of hitting the bump and help restore the vehicle to steady state as quickly as possible. Appropriate staffing that considers the condition and aspirations of the company provides much the same function to the stakeholders of a company. Finding and eliminating true waste in your organization of the obligation of leadership. The art of the processes is appropriately defining “true waste” and ensuring appropriate organizational shock absorbers are in place for the risks of your particular business.
Before I get into this, let me assure you that I am not advocating waste. There is a big difference between running lean and still having sufficient bandwidth for growth, continuous improvement, and innovation and cutting to the bone to some perceived benchmark status. If your operation:
- has aspirations for growth
- believes it still has to mature its processes or its use of them
- is committed to continuous improvement
- functions in an environment where a misstep is expensive in terms of customer perception or financial cost of recovery
- suffers from dysfunction, silos or politics
Leadership teams that ignore these realities step over dollars to save dimes. They save relatively small amounts on resources but pay the high costs of crisis recovery that the resources could’ve prevented.
On the plant floor, there is an optimal staffing for a given work content with trade offs between manual labor and automation. In a well run operation the work is, by definition, repetitive. There is an optimal number of process steps. There is an ergonomic plant layout that minimizes wasted effort from operators. Cutting too deep is evident when the operators don’t have sufficient time to perform all of the steps. Operations and Finance are very good at defining and achieving the optimal condition.
It is tempting to apply the same approach to staffing the “front office”. For the parts of the business that are, like Operations, repetitive, it’s possible define an optimal staffing level. Just because you can define it, doesn’t mean you can immediately achieve it. Process implementation and validation, overcoming politics, and having a leadership team that is primarily committed to each other are all required before the whole operation will function in a benchmark way. In short, suboptimal conditions in parts of the organization will require suboptimal staffing. That only addresses the repetitive portion of the company.
What's next are resource needs that are beyond the repetitive tasks in the office. Continuous improvement and new business acquisition are examples of activities that can drive the need to carry “extra resources” to provide bandwidth to accomplish that work.
There is another non-standard condition that drives the need for “extra resources”: the turnaround. If there is a department that is in a constant state of crisis and affects the rest of the organization, the focus has to be on stabilizing. Savings through stability is a starting point that often comes from covering the challenged area with resources like a blanket. Stability buys the space to install and prove out the processes that will ultimately drive the opportunity to target benchmark staffing. Attempting to jump directly to benchmark staffing in a department in need of a turnaround will result in crises, expensive recovery and employee turnover due to people getting burned out.
There is no doubt that any competent leadership team will seek to reduce costs by eliminating waste. However, blindly doing so without considering the need for micro-turnarounds; bandwidth to achieve objectives beyond steady state; savings through stability; required flexibility for non-repetitive roles and a buffer to provide shock absorbers that protect employees, financial results and customers from the effects of chaos ignores the necessity for a credible plan to achieve the objectives of the organization.
Shock absorbers don’t stop vehicles from hitting bumps. They isolate the occupants from the true impact of hitting the bump and help restore the vehicle to steady state as quickly as possible. Appropriate staffing that considers the condition and aspirations of the company provides much the same function to the stakeholders of a company. Finding and eliminating true waste in your organization of the obligation of leadership. The art of the processes is appropriately defining “true waste” and ensuring appropriate organizational shock absorbers are in place for the risks of your particular business.
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