PROBLEM:
With our now streamlined workforce, we are over-allocating reduced staff with tasks they are either not trained for or not interested in, resulting in both reduced efficiency of business and loss of focus on our primary goal – customer satisfaction and Retention.
Hypothesis #1
There is a calculable (lost) opportunity cost that each employee has which results in a dollar value per hour for obtaining new business. amount of revenue / (number of hours spent * loaded cost.)
Hypothesis #2
The higher up in a company an employee reaches, the higher the (lost) opportunity cost. This is due to the size and nature of the larger deals vs. the experience level of the executive helping work the account.
Hypothesis #3
The higher-up employees have the greatest experience and ability to handle more work that a less expensive resource and/or more talented (experienced) resource could do for less cost.
Hypothesis #4
The more accrued lost opportunity cost a company has, the more likely that company is to experience significant business challenges.
Here is my first pass on analyzing this challenge.
I feel that we are inefficiently utilizing our best employees doing the wrong work. Here are examples of what I see at different companies:
CIO
– Should be setting the vision for the future technology needs of their companies while evaluating purchases that ensure the future migratory (legacy v. future) cost of operations is the best value for the company, spread over time understanding the growth model directed at the executive level.
– Are currently spending an estimated 30% of their time as Support Center analysts, taking calls from employees about printers, PCs, and office equipment not working properly and attempting to delegate solutions (where possible). Spend an estimated 40% of their time accumulating, evaluating and managing (mostly accumulating) projects of diminishing sizes. Spend 40% of their time managing (or under managing) high-tech personnel requesting and requiring technology advancements and certifications (more exciting projects, more lab equipment, faster computers and the like). And finally, spends 15% of time, (yes, that makes 125%, or a 50-hour week), wondering how they are supposed to spend 100% of their time being true CIOs and benefiting the company.
CFO
– Should be setting the vision for the future financial requirement needs of their companies while maintaining relationships with banks, venture capitalists, government regulators, audit firms, investor requirements, cost analysis by company, division, department and investment opportunities.
– Are currently spending an estimated 30% of their time managing G&A expenses at the detailed level for each company, division and department. Spend an estimated 30% of their time in meetings discussing G&A expenses. Spend an estimated 60% of their time managing departments such as technology and sales, attempting to guide them (financially) to the quotas they are required to reach. And finally, spend 15% of their time wondering how they are supposed to spend 100% of their time being true CFOs to benefit their companies.
Call the titles what you like:
CEO, COO, CIO, CFO
Business Manager, Sales Manager, Services Manager President, Senior Vice President, Vice President
We all have talent that is being misused, and therefore we pay a very high cost for lower cost solutions as well as the (lost) opportunity cost for each opportunity.
The challenge is that technology is pervasive. It is in every part of our lives especially in our businesses. We rely entirely on the capabilities of our networks and computer systems to work when we need them. We are captivated.
Let’s take an example of what I see happening out in the real world. Here is a widget company. They manufacture widgets at their plant; they take orders over the phone and via the Internet with a successful sales team marketing to the large local accounts. Technology is everywhere…automated inventory, and conveyor belts through assembly, testing and shelving. Then order fulfillment: picking, shipping, invoicing, collections, accounting, banking and investors – all flowing and moving on and through computers with the speed of light! A full technical staff supports all the users with their needs, two senior technology managers keep all the issues prioritized and assigned, with the CIO constantly evaluating new systems and new computers to better tune the business and squeeze more gross margin out of each process. The senior manufacturing manager oversees the floor and inventory stocking and reserves as well as all the issues from the assembly employees. When workers are out sick, or leave, the manager is right on it with a new training program to bring someone else up to speed instantly. Wow, that was the 1990s!
Today the technology staff consists of one engineer (recently hired), a “home-tech” who just finished upgrading his son’s PC at home and used to work on the assembly line, and the CFO, who recently was given the opportunity to increase their skill set after the early retirement of the original CIO. While the aging computers begin to wear out, the CFO is simply trying to keep up with the new stacks on his desk – problems with printers, staging line bugs and the new issue of inventory management. The phone rings constantly – thank goodness for cell phones so he is reachable anywhere in the building. The office manager now takes care of the line people and their issues, and of course, brings the employment issues to the purchasing manager who is now in charge of HR.
Guess who is spending more time on accounting issues? Well, you started that way a long time ago anyway so you can certainly figure out what to move around each month and it only takes an hour or so each day to speak with the accountants to make the appropriate entries. It’s part of the new world until things break – right?
Sound familiar? Things are certainly getting done, but at what real cost? Who is spending time with the sales team, seeking out the large accounts that you desperately need to close for cash flow purposes? Who is keeping the staff focused and motivated these days? Everyone is so busy; no one has time for meetings anymore. When was the last executive retreat to discuss the future? How long before the CFO gets tired of supporting sales and technology when all he really wants to do is crunch numbers and talk to bankers? Basically, the CFOs are not really sure what the tech people are even talking about – bridges, routers, T-3 lines, CDMA, 802.11b, Bluetooth?– and it always costs more money.
When was the last time you had time to meet with that customer who is expanding offices down into North Carolina? Are you included in those expansion plans? Maybe he will phone you today. Seems like you spend endless hours with the bankers, trying to invent new ways to spin your old business plan – and you still haven’t gotten around to developing the new millennium plan you used to dream about, but you still need to extend your line for payroll.
What we are doing here is de-motivating our best people by having them do things they are not qualified for, and worse – have little interest in doing. This situation creates frustration and fear. We are also not spending time with the two most valuable assets we own…our customers and our employees!
Is this trend reversible? Can we fix this with one swift flick of our wands? Probably not. But I see some things that we can do that can quickly help us regain our focus and hopefully our futures.
I know we’d all love to simply hire back all the talent that we had to let go and move quickly out of this fog, but we know it’s not that easy. What we can do, however, is focus better.
Hire a consultant to help manage specific pieces of your business that are taking away your real talent from what they do best. For example, instead of having the CFO manage your day-to-day IT support, bring in a consultant three days per week to manage the pile of issues to resolution – then let the consultant go with great thanks. Instead of having purchasing manager deal with the day-to-day issues of the assembly line, bring in an HR consultant to get everyone back on a routine, setup a new process, and teach the manager how to oversee it. Hire a project manager to assemble a team to analyze your old assembly process to see what changes might be made to make it more efficient.
Bottom line, consultants may seem expensive, but we have to look at the bigger picture.
1. We can let consultants go anytime, without any penalties or government regulations or legal obligations.
2. We can trade consultants until we find the ones that fit best with our personalities and business needs.
3. When we use consultants, our employees aren’t concerned that new full-time employees keep coming and going (and wonder who’s next).
4. The consultants we choose are experts in special areas we are challenging our own people to learn by fire.
5. These people can focus on the issues and not get spread thinly across many areas.
6. Your people can get back to doing what made you successful in the first place – using the talents that you hired them for when you selected them, and being enthusiastic about what they do.
Will consultants put you back on the boat tomorrow with no worries? Not a chance with today’s economy. But they can give you something you haven’t had in a long while – time. Time to think, time to plan and time to build. When the world is right again, you can hire back talent full-time to continue your growth plan; for now, every dollar you spend freeing up talent AND getting expert help will help you get where you need to be faster!
Skip Blackburn is President of BIT Solutions, a Software/Network/Business consulting company dedicated to providing a low cost total solution to your business needs. BIT Solutions specialized in Education, Associations and Healthcare organizations.
Website: http://users.rcn.com/acbbse
E-mail: skip.bitsoltions@rcn.com
Phone: (410) 974-9337
