2.41 Economic Development & Spending Cuts

Innovation Junkies

Jeff Standridge:
Hey guys, welcome to another episode of the Innovation Junkies Podcast. I'm Jeff Standridge.

Jeff Amerine:
And this is Jeff Amerine, glad to be back.

Jeff Standridge:
Hey man. How are you?

Jeff Amerine:
You know, hanging in there excited to, uh, to talk about this interesting economic environment we're in and what that means as far as innovators and leaders and some of the enterprises and organizations we see.

Jeff Standridge:
Yeah. So we, you know, we spend a lot of our time focused on helping organizations achieve sustainable strategic growth, sustained strategic growth rather. And we do that through our podcasts. We do that through our coaching engagement, through our consulting engagements, through a lot of our social media posts and our, and our writing and, and speaking and what have you. But, but here's an interesting scenario today where you just talked about another fortune, fortune 10, you know, first, certainly a fortune 100 company announcing layoffs, um, and spending cutbacks and spending and, and what have you.

And so how do we, how do we help our listeners think through – what we're going to talk about today is how do we help our listeners think through the concept of, all right, you've been pushing me to strategically grow, strategically grow, strategically grow. Now I'm facing economic uncertainties and I've got a cutback spending. How do I think through those spending cuts in a manner that doesn't gut the organization or doesn't gut my strategic growth engine.

Jeff Amerine:
Yeah, I mean, it's excellent. It's where you teed up the point there in a really solid way. And to even paint more of a picture, although I think most people are probably aware of it, you've got rising interest rates, which means your cost of capital is higher, you've got a slowing economy by any measure, and yet we still have the lowest participation rate in 50 years. So you can't necessarily find the key talent that you might need.

And we're seeing demand slowing. One of the consequences of higher prices is they eventually cure higher prices by reducing demand. So if you're in an organization, whether you're a B2C organization, selling to consumers or whether you're selling to other enterprises, it puts a lot of stress on the senior leadership to figure out what to do, how to react to that and what are some, what are some techniques and things you've seen done in the past?

Jeff Standridge:
Well, I can, I can tell you what I've seen done in the past that I'm not certain what I'm pretty certain are not the right techniques is, um, you know, I have long said that a mass layoff is a, is an indictment on every leader who has responsibilities for hiring and firing and workforce management. An across the board, spread the peanut butter, we're cutting 10% of our workforce, 12% of our workforce is an indictment on everyone who has the responsibility for their workforce, because we should be right sizing our workforce on a daily, weekly, monthly basis based upon the, if we lose a big client, then we can't carry the team that service that client until we get another one. You know, if, if, if the revenue is coming in lower than expectation, we need to relook at our workforce. And that doesn't mean go fire three people tomorrow, but it could mean we're not going to back – we're going to put a freeze on it. We're not going to backfill any new positions.

So using just in time, and I use that word a lot, but making decisions just in time to manage your workforce based upon the clients and the revenue that's coming in the door and not being afraid. You know, I, when I say a mass layoff is an, is an indictment I'm talking about, as I said, an across the board, peanut butter, I'm not talking about reducing positions when you lose a client or when the revenue comes in below expectation and it's going to