Do More With Less

In an uncertain market, it is important for organizations to learn to do more with fewer internal resources. In a recent study of over 4600 respondents, nearly a third (31%) believed that shortage of labor / talent is a top challenge for their organization.  Furthermore, on a year-over-year basis, staff development/expansion was down significantly as a top strategy to achieve business goals (from 31% to 22%). Although business execution (34%) and new products / services (34%) remained the top strategies most often cited in aggregate, 37% of CEOs believed that strategic partnerships are a top strategic priority in 2008 (second only to business execution at 40%). Furthermore, the research indicates that there has been a marked increase in the outsourcing of select functions. For example, in 2007, 24% of organizations engaged in IT outsourcing with 10% predicting outsourcing in the future; in 2008, 42% of respondents are engaged in ITO.  Similarly, there has been a rise in the outsourcing of select manufacturing processes (a rise of 13% to 23%).

As part of a defensive strategy in a down economy, organizations should consider a multi-pronged strategy to address the shortage of talent. First, organizations should be prepared to outsource increasing complex functions to achieve strategic goals. However, it is important to note (and understand) that outsourcing does not necessarily mean off-shoring. With rising transportation costs and a falling dollar, America may yet become a low cost country source (LCCS) Second, organizations should consider engaging in partnerships to rapidly develop new products, services and competencies. Next, managers should review the competencies of the current staff against the newly aligned strategic plan – and cut dead weight where possible. Lastly, you should use the perceived downturn in the market as an opportunity to identify and aggressively recruit top performers into the business.