Blurred vision

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Sometimes the pressure of tough economic times can make seeing clearly more difficult, sometimes leading to rash decisions that will be regretted later



13 October 2008

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"I’m facing a very difficult situation this year. My costs are up across different areas of my business and my sales are down at the same time – significantly. I’m going to have to start cutting back and the staff are the obvious place to look. Part-timers aren’t the problem really, it’s the more long-term employees that I have to lose. I’m not sure about the legal implications and all that, but I’m also in a bit of a moral dilemma because it’s some of the older staff that I’d be inclined to let go before the newer ones – on a performance basis that is. It would be a case of sending the first in, out first, so to speak, and they’re even local where as the others aren’t. I don’t suppose I have much options but I’m kind of afraid of handling this wrong and facing all kinds of ramifications. Any advice?"

The dilemma of losing older non-performing staff is generally associated with cutting costs. The current environment, officially a recession, is triggering these cost-cutting strategies at alarming rates. The question that I ask most of my clients is how much the external “doom and gloom” in the media (now nearly a form of negative brain-washing) is effecting your business decisions?

Before looking at the “moral dilemma” you are facing, I feel we need to go back to basics. By basics, I mean the vision for your business. It is still possible to have a vision for the future in recessionary times. In fact, depending on the business you are in, you may be at an advantage at the moment.

Why? Because many of your competitors will be looking at the same-cost cutting measures, looking at pulling in the reigns during recessionary times. Although the reality of the down-turn is real, this is not necessarily the time for putting your business on hold. In fact, there was a time when you needed all the staff you have and more. The current down-turn is changing the mind-set of many Irish business people. Can you change it back with a more positive spin?

Look at the vision for your business: What is its purpose and its vision?

Let’s start with some obvious questions around the purpose of your business. What does your business do? How does it operate? Now try to explain your business to a five or ten year old child, in detail. This is where all of the components of your business will become more obvious; perhaps something you are currently overlooking. Maybe a method of operating before the “boom” (if you were in business at that time). Something you have overlooked because you were too busy during successful times. 

Ask yourself why you are in the business. Perhaps the answer is money. Ask yourself what else. Keep asking until you have a complete list of why you are in the business. I recently coached a client who wanted to make money. It appeared to be his main purpose for the business, nothing else. When he stopped making money, he believed his business was doomed. It was not. By the time he had a list of the reasons for being in business, he realised that there were so many more positive reasons for running his own business and as long as he was not always losing money he had sufficient reason to continue with the business.

Look at your customer base. Who are your Customers? Are there different types, age profiles etc. Perhaps ask yourself what outrageous success looks like for your business? 

Current reality

I now ask you to take a look at the ‘current reality’ of your business, again answering a number of questions. Please write them down; your thoughts only become clear when written down. Explore the current reality under the following headings:

•    In relation to my vision, here’s what’s currently going on

•    What have I done up to this point to get things going?

•    My competitors include

•    Is this business financially viable in its current form? (why/why not?)

•    What’s my “burn rate”? (Monthly expenditure – how long can you stay in business at your current burn rate before we run out of capital?)

•    Which of your employees generate more income than they cost? (A question, close to your reality and that will really get you focussing your thoughts in the right direction)

At the end of the year, how will you define “success” in relation to your business? Maybe imagine that it is one year from today and it has been your best year yet, what have you achieved? What is your new current reality? What are some of the longer-term outcomes for your business? How will you achieve your outcomes for the year?

Strategies for the future

It is worth looking at the strategies that take you there. Some of these may include the cost-cutting measure of removing some of the staff. But first take a look at some of these questions:

  1. What do you personally intend to do to drive the business forward?
  2. What are your major obstacles and how will you overcome them? 
  3. What’s missing?  Where can you add more value?
  4. What will/do customers buy that you are selling?
  5. How will you market to your ideal customers?


Actions to move your business forward

What have you been procrastinating about that will make a significant difference to your business? If you had all the appropriate staff you needed, what actions would you get them to take on your behalf? Make a list of the actions that you could take in the next 90 days to move your business forward. I use 90 days as it creates new habits and will see you to the end of the year. It creates a positive mind-set until January 2009.

Now let’s look at your initial question with your new wisdom around the purpose and vision of your business.

“I’m going to have to start cutting back and the staff is the obvious place to look.”

Yes, reducing the number of staff will cut cost. But when you take in some of the legal implications, redundancy etc, it may not necessarily be the answer. Focus on the answers above, how many staff you need to achieve the vision outlined above.

Let’s now focus entirely on staff using the time-line (a simple graph – anything above the line is good performance, anything below the line is perhaps not so good). For each of your permanent full-time staff mark out the highs and the lows of their employment with you. See if the peaks in performance match peaks in the performance of your business or sales. Maybe look at how the employee was interacting with you and/other other colleagues during this period. You will quickly be able to identify the employees that helped achieve peak performances.

Alternatively or, in addition, you might consider looking at the coaching tool I call "Connecting the Issues". I would suggest that you draw this matrix onto a large page. Across the top column, map out the people working in your organisation. In the vertical column, map out the resourses that you need: marketing, accounts, good with customers, knowledge of the business systems etc. Think of everything that is vital for your business to succeed. Complete the matrix. You will very quickly identify the strong employees – employees that you may not be able to do without. The people that potentially may be overlooked.

Connecting the Issues

When you have completed all three exercises, you will be well-armed with the vital information you need when you are approaching employees. You will be able to state the vision of the organisation; where you see it in the next couple of years. You can explain the exercises that you have conducted, the analyses of the needs of the company, and the excess staff needs, in a truthful well-researched manner.

Quite often, when the business mind is focussed on money or lack of it, we lose focus and direction. I really hope these coaching tools and questions will guide you on your cost-cutting mission. Good luck. 


Meet the Coach
Eibhlin is the managing director of thinkCoaching, which works with business teams, executives, managers and self-employed professionals to help them discover their core strengths and create bottom line results. Her specialty area is talent retention of individual high performers.
Eibhlin has over 17 years experience in financial services and uses her past expertise to help business-owners. For more information visit or call 353 87 8583564. 



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