Is Reducing Costs Simply a Cost-Cutting Exercise or a Change Management Strategy?

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Right now we are in the midst of a cycle where revenue and margins are under pressure and focus is on management/reduction of cost. Almost daily the media carries news of companies shedding staff.

When cost pressures increase, leaders can become almost exclusively task focused, at the expense of supporting and enlisting the commitment and contribution of the very people they need.

So if reducing cost does mean reducing people, then how important is it that the leadership team sees this as a strategic decision and not just a cost-reduction exercise?  Leaders need to be cognisant that even a perceived tiny threat can have significant impact on their people. (Rock 2008)

Reducing staff requires careful planning because when markets turn, and they will, companies find recovery is delayed because they no longer have the right talent in place to enable them to adapt and respond quickly to emerging opportunities.

Think carefully, not just about immediate needs, but about what knowledge, skills and experience do you need to retain and grow to set you up for the future!

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Visit Vivente’s corporate headquarters at Level 33, Australia Square – 264 George Street; Sydney, NSW 2000 AUSTRALIA or Telephone us at +61-2-8211 2771.

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