The key to survival in the “New Economy” is in deploying technology — not in pink slips
I recently read a Newsweek article entitled, “The Case Against Layoffs” and it substantiated a lot of what I have seen over the last 20 years in financial services. The common thinking that layoffs will result in increased profits, stock jumps and increased productivity to a firm just doesn’t play out in reality. Perhaps behaviors will change as technology continues to improve and impact the way the world does business. Given that the focus in 2010 for financial services firms is the “customer” and creating customer intimacy, it would seem that enabling employees to meet and exceed the client’s expectations would be a top priority.
If people are your #1 asset why would eliminating them add value to your bottom line? Perhaps the best way to create customer intimacy and remain competitive is to look at the technology you employ and provide to your employees to serve your customer – the originator of your profit/revenue. If the key to increased profits is improved client experience and loyalty – which has been proven not only in financial services – but across industries – why not focus on improving that? Often, taking people out of the equation results in a lapse in customer service, which causes a decrease in client satisfaction, and ultimately revenue loss.
Perhaps looking to the CIO or the CTO [instead of the Head of HR only] could lead to a new approach in “restructuring” that could actually add real value to the bottom line. If your sales teams aren’t closing the business with the customer – take a look at the tools they are given for customer acquisition. If once acquired, clients are not having a good experience doing business with you – take a look at how you interact with them using technology.
Technology doesn’t have to replace people and the client doesn’t want it to. When technology is deployed as a tool to your employees it enables them to engage with the client and grow that relationship to increase profits. The result is positive for your business, the client and global corporate citizenship – which is key in regaining client trust given the prevailing negative image of financial services today.
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2 Responses to “The key to survival in the “New Economy” is in deploying technology — not in pink slips”
Comment 1
Frank Sanseri on Feb 12, 2010I agree wholeheartedly that it’s always better to find an alternative to pink slips. As my high school economics teacher explained to me once, the problem lies in a company’s misunderstanding of the the impact of any layoff. The common thinking is, “this employee does not represent a customer of mine, so his job loss doesn’t impact my sales.” It’s true on the surface; but a more in depth analysis shows that although that employee isn’t your customer, he IS somebody’s customer. And he can no longer buy from that company because he is unemployed. This trend spiders outward — job losses at one company, lead to bad sales for another, which leads to job losses at that company, and so forth. And at some point, the company that is losing money IS your customer — and now, that customer can’t buy from you. So, the net effect here is that you’re losing business. And what looked like a good way to keep a little cash now, has finally hurt you. The only solution, then, is to find ways to cut costs that don’t involve the outright elimination of jobs. To put it simply: every employee that leaves the workforce, is a consumer that leaves the marketplace. And since we are all connected by the same economy, that will always have a negative impact on the company that does the firing. If not today, then certainly tomorrow.
Comment 2
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