After the furlough comes the technology

Cutting down the organisational headcount will only cause longer term health issues.

Mature businesses are adapting and innovating and not just making a knee jerk decision to reduce the headcount, a leading CIO said in a podcast to the CIO community I was moderating. In the post-Coronavirus recession that all economic experts now predict, there will be many organisations that will reduce their staffing levels. But as the three CIOs expressed, this is often a short-term fix that leaves damaging symptoms behind in the organisation.

Headcount cuts are often easy. No one denies that there are times when there is no other option. The results from a headcount cut can often be seen on the bottom line pretty rapidly and this will please certain quarters of the shareholders and boardroom. But as Mark Lockton-Goddard said on the podcast, it can also be seen as the easy way to deal with wider issues.

In the current world economy, organisations need precision tools, not blunt instruments, sadly though the sledgehammer approach is all too often used. Why? Sadly it is the method of choice for poor leaders who can quickly readdress problems with the bottom line. 

The bottom line is just one form of analysis business leaders must use. In today's data-led economy there is a wealth of data available within the business and external to the organisation that can provide a rich and varied picture of how the organisation is operating, the performance of technologies and services and the sentiment of the market. Twice in the last month I have led debates where business, technology and sports leaders have extolled the virtues of using your data to truly understand the issues the organisation faces. The bottom line - vital as it is - does not paint a rich picture.

This lack of analysis allows poor leaders to hide behind short term boosts to the bottom line. If a data analysis of the total track record was to be analysed, there is the likelihood that poor leaders would be exposed as weak at best, asset damaging at worst. 

Business technology leaders need to be especially careful with managing the headcount at present. Furlough and a purpose driven, skilled and transient workforce is not as supplicant as previous generations of workers, who took poor leadership and treatment on the chin. Today old pyramids of power have been levelled and the amount of choice available to talent provides freedom to work with organisations on terms that are far more rewarding and equal. 

All three CIOs on the podcast described how innovation to the business and its processes is going to be more important in a post-pandemic economy.  With the possibility of repeat episodes of the pandemic to come over the coming years organisations need to develop technological solutions to enable digital services, remote working, protected environments, collaboration and great customer service. Any business that attempts to take on this workload whilst carrying out wage arbitrage is setting itself up to sicken badly if repeat pan or epidemics do occur. Do you want to take that risk? 

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