As times get worse in this industry – which is now 70,000 jobs lighter according to reports – it becomes even more important to cut those costs to the bone.
By Ross Sturley
But even at this time, we need to be thinking about positioning for the recovery. So we need to make sure that while we cut to the bone, we don’t cut deeper, and weaken our basic structure.
In fact, as previously demonstrated in this column, it’s possible to think of a few strategic investments at a time like this, which would leave us in a stronger position when the fabled green shoots start to sprout. Sensible marketing designed to increase customer loyalty, or increase market share for example would be one of those investments.
So, we shouldn’t cut Marketing, but we’ve got to cut something, so what should that be then?
No 3. Administration
If it’s jobs that must be cut, then it’s important that the cuts do not affect your basic capability to do business – you need to make sure you’ve got enough hands to fulfil your contracts, for example.
And of course, you need to make sure that all the admin back up stuff gets done, so it would be silly to cut all those FM people, secretaries, accounts clerks and so on, wouldn’t it?
Well, maybe not.
Construction companies have been ‘offshoring’ many aspects of work for some time, detailed design (particularly in process engineering installations like refineries) has long been outsourced to detail shops on the Indian subcontinent.
The rationale is simple, for such work, client knowledge and understanding, and even geographical proximity, is not essential.
But you can’t apply this to organising biscuits for the board meeting, surely? Well – apart from the fact that if you read ‘ten things to cut, no.2’ you don’t need the biscuits anymore, yes you can. Getfriday.com is just one of the many Indian businesses offering ‘virtual support’.
You just e-mail them what you need and where, and they sort it out for you. Biscuits for the board meeting, this week’s stationery order, getting the council to collect the rubbish – all these things can just as easily be done from India, and at a fraction of the cost.
FM can be outsourced closer to home – if you’ve a small army of people cleaning and maintaining your fifteen locations, get someone like Faceo (www.faceo.com) to sort it out. They’ll take it all on, and do it better, for less money.
And why stop there – how about the junior aspects of payroll management, or accounts? If you intend building a strategic differential between you and your competition based on being able to add up well, then good luck to you in your next job. If not, then outsource it to some very well-educated, but slightly poorer people.
One large company that I occasionally work for has shifted all payments management to the subcontinent relatively recently. So far, they’re still paying me.
The nub of this suggestion is that it saves money but doesn’t make headcount cuts in areas where market knowledge and contact is important. Marketing is one of those areas where that stuff really matters. Cut those people and you’re losing knowledge, experience and relationships. That’s bad.
Of course if your marketing team is one of those which sits in its office all day every day with the door closed, not talking to any customers, but heavily focussed on making pretty pictures, then outsource them too. That’s not marketing.
The other nine items in this series will be the subject of one of the presentations at the CIMCIG Annual Conference, in February next year. The subject is ‘Downturn Marketing: A survivors guide to the recesion’, and you can see more about it at www.cimcig.org.
Ross Sturley is Principal of Chart Lane, a strategy consultancy, and a member of the CIMCIG organising committee.