Management's Wrong Decisions During an Economic Downturn

In every economic downturn, the bad decisions made by companies continue to amaze me. Economic struggles and downturns often prompt drastic and reactive decisions by company management. Their instincts are to "cut back" so they close divisions/plants/stores, layoff staff, and implement salary and hiring freezes.
In addition, many strategic initiatives that are critical to successful day-to-day operations, and continued and improved profit generation are stopped or put on hold in an attempt to cut costs. Often, this encompasses training and consulting contracts and programs, including the deployment of process improvement -Six Sigma, Lean, and Enterprise Resource Planning (ERP).

Although it seems logical to cut contracts and programs during an economic downturn, strategic activities of this nature should be enhanced and provided more focus than when "times are good." Companies should instead focus on cash flow to survive the downturn, but keep their strategic programs in place to better position them for the future.

Specifically, here are some examples of how process improvement programs and initiatives can help in good and bad times:

Lean eliminates the waste from processes which can reduce cost and increase cash.

Six Sigma removes the variation in processes which reduces cost and can increase cash by improving quality.

The use of both Lean and Six Sigma identifies the steps and/or employees in a process that are not necessary, thereby allowing targeted reallocation of resources rather than a cross-the-board layoffs.

Management that focuses on directed project selection aligned with changing corporate goals will not only survive, but position themselves beautifully when the economy takes an upward swing.

Dick Booton is an executive recruiter that specializes in assisting organizations with their Operational Excellence (Lean Six Sigma) Deployments through the recruiting of professionals with Lean Six Sigma skills and experience. Dick has experience with various industries (healthcare, financial, distribution, manufacturing and resort management). His contacts in Lean Six Sigma are unparalleled. Contact him to discuss how he can assist your organization.http://EzineArticles.com