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? 

It is well documented that headcount reduction processes regularly lead to organisations suffering reduced morale of those that stay, but more often than not, the best and most talented members of the organisation see little future ahead and seize the opportunity to leave.

Now is not the time to lose talent or demotivate your most valued frontline workers - now is the time to give them freedom and to jointly explore their ideas, as they no doubt host the innovations your organisation needs at this difficult time. 

Communicating to fellow members of the leadership team that this is the wrong time to make cuts won't be easy - though for business technology leaders there could be wriggle room given the survival techniques and benefits delivered during the crisis. But technology is the innovation opportunity, and with the skills and knowledge of people across the business, then duplication, excessive levels of process and operational tasks could all be modernised and removed. This process will improve the bottom line more effectively than staff cuts. If done in partnership with the organisation's people then a host of talent is ready to be redeployed to new roles that will deliver more value to the organisation. 

The 2020 Coronavirus pandemic has changed behaviours around the world, for example US online grocery sales doubled in two months and many will not revert to old methods. The customer will continue to change their behaviour, so business technology leaders must be at the vanguard of innovation, which will both improve the bottom line, but also protect the business from organ failure.