Dealing with the immediate problem

Short term pressures are understandably grabbing managers' attention: the old adage that ‘cash is king' has been dusted off, polished and given a prominent position, and much effort is devoted to finding and realising opportunities to preserve or to generate cash. "How can we do the same with less...quickly?" summarises the immediate short-term needs. The challenge, particularly where cost-saving measures are concerned, is to make sure that choices made in this respect are made wisely and implemented effectively. There is a real risk that, because of the keenly felt need to act speedily, rash decisions are made which may be regretted later, or that corners are cut in the execution so that the results are tragically disappointing.

In order to avoid such problems, a good process - both for making the right choices, and for ensuring cohesive implementation - is more critical than ever. All but the most trivial choices involve trade-offs, which sometimes cast their shadows well into the future. Harnessing all relevant knowledge in the organisation is one of the best ways of making sure that no options for preserving cash are overlooked, and that they are examined from all necessary angles, thus providing a clear picture of the trade-offs involved and a reliable basis for comparing the different possibilities. The imperative is to strike a good balance between speed and depth, and this is where a clear process is needed. It should combine a sense of urgency (e.g. through milestones and deadlines) with broad involvement and effective tools to tap into knowledge and turn conflicts into constructive trade-off management forms a key ingredient for success.

PSM's role in this phase of the Downturn is in establishing this all-important process for improvement, and falls into two areas:

• Helping you to make the right choices
  Recognising that you've probably already made some choices of what needs to be done, we won't reinvent the wheel, but rather we will challenge and develop your existing thoughts and help turn these into realistic and ambitious projects to ensure the required actions are delivered effectively and efficiently. For example:
  • Take a fresh look at the financials using different approaches such as Activity Based Costing
  • Use Value Stream Mapping to drive out waste
  • Apply challenge. What would you do differently if you only had 60% of your current overhead budget - what would have to go?
  • Consider outsourcing both core and non-core activities
• Establish productive ‘traction' and realise benefits early
  It is important that Leadership is aligned around common goals (as defined by the ambitious projects referred to above) and that momentum is maintained through rigorous project execution and strong governance coupled with effective communication of progress.

We help to achieve this through our experience (both sector- and function-specific), our independence and through our skills at engaging managers and staff in a focused way. The outputs for you will be both in terms of immediate benefits (shortening and raising the down-curve) and in skills transfer, enabling future issues to be dealt with more effectively.

Success in coping with an economic downturn is strongly correlated with two factors: making the right choices, and speedy, effective execution. If you want to cut activities that do not form part of the organisation's longer-term plans, doing so according to a well-defined, structured process will ensure you're on the right track.

For more information please e-mail info@psmconsulting.co.uk