Thursday, April 30, 2009

The no hire, no fire strategy

From WhatTheyThink:
Creating Opportunity Out of Adversity
By Mike Grasso, PrintLink USA
. . . Thus, for new hires, PrintLink works with our client companies to uncover candidates who will arrive with as much of the requisite knowledge and skills as possible. Additionally, although it has always been important to invest in training, in our current challenging times it is more critical than ever. So we advocate the regular in-depth review of job descriptions and their accompanying skill requirements, then maintenance of a practical plan to fulfill both."
The new rules are the old rules. Keep fixed overhead to the absolute minimum. Get as far as you can from the risk of "machinery." Once you make the nut, your marginal profits are great. If you don't make your nut, your either in debt or go out of business. Just ask any of the globals that have crashed and burned.

The under appreciated fact is that web technology makes much of the fixed costs unnecessary. When it was hard to manage information, a value chain organization makes good sense. It passes the "easy for me, hard for you" business litmus test. But when information is easy to manage the rules change. Now "it's easy for mSB (micro small business) and hard for you (globals, et al with legacy rules and incentives.)

Some globals solve the problem, Google and Walmart are my examples du jour. P&G and Kelloggs seem to have it right. It's usual the secret sauce that separates the winners from the losers.

So stop thinking about hiring. You probably can't afford it. Plus who knows what the world is going to look like next month, year or decade.

Stop mass firings
Firing classes of people means destroying very expensive human capital. It is the Wall Street common wisdom, but every small business knows that it is the very last option before filing Chapter 11. If that's the case, then you have no choice. But if you're not preparing to bail out. Don't do it.

Instead give your present employees the choice. "EITHER we will help you transition to the next phase of your life OR we will help you set up an off the overhead networked business, and we will be your first customer. It's what lots of people are doing anyway.

Very, very few people want a 9 to 5 or 9 to 9 job. The good news is that knowledge work happens in short bursts. Nobody can do knowledge work in industrial time/space. Ask a designer or a writer or an analyst. You're on 18/7. But you "work" at 20 minutes at a time. If the situation demands it you work 12 hours straight. Then you take off as much time as needed to recharge the batteries.

Besides, when the health care system in the States gets even a little fixed, you better be ready for the rush for the exits. Then the problem is going to be how to get them back. But trust me, masses of knowledge workers are not going to be lining up for jobs. They will be in their own businesses and you will have to pay for them when you need them.

It will be more expensive in the short run. But since the cost will be built into the sale price, that should work just fine for everyone. Why not get a jump on what's going to happen anyway?

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