Cost cutting, cutting to the bone, cutting down to the bare minimum resources is praised as efficient. But it’s not. Once all the resources have been reduced to a minimum, a series of unintended consequences are seen. People who used to interface with 5 others, now have to do so with 15. Personal touch or intervention becomes mechanical. A sense of exploitation decreases employee engagement. Corporate memory disappears. Knowledge transfer is impossible. I can list 20 or more negative consequences.
The problem is that having been crafted under the banner of ‘efficiency’, it becomes politically incorrect to challenge it.
Overlapping jobs, shadow roles, some slack, even some reasonable duplication, may in reality be very efficient. It provides the cushion needed for knowledge transfer, organizational learning, contingencies, rapid reaction to customers and, above all, a fluid human fabric that can be employed in a flexible way.
The ‘centralisation’ of services ‘at any cost’, the avoidance of duplications even small, the resourcing with no slack of any kind, is a fundamentalist view of the organization that only people who have never run organizations (and you can find lots of them in Big Consulting Groups) can recommend. It’s non-sense mantra that only pleases people who mistake the company for a spreadsheet.
The cost of the cost savings can be a very poor ROI. A very, very, very efficient company with no slack, would not have my money.
Great point. People understand that the lack of any slack is dangerous when responding to bad surprises, but even worse is that it makes it impossible to innovate, try new things, exploit unexpected opportunities, and make some mistakes in doing that. A tight organization may run OK for a while, but it’s immobile, just waiting to die.