Right-Sizing in “Challenging Times”

by Bill & Chris Sitter

 

Let logical method and clear communication be your guides as you evaluate staffing needs in the dealership.

Our participation in the recent AED Executive Forum provided one more great opportunity to gather the pulse of the construction equipment industry. Most speakers, including economic forecasters, made rather dire predictions, at least for the short-term. Although some dealers and manufacturers reported fairly good situations, we felt the overall mood was one of concern…but definitely not one of despair. Since the Chicago event, the country's financial crisis dominated the news, as Congress and the President sought solutions to reverse the curse from years of reckless mortgage lending. Well…enough of that, as we will all agree that 2008 and 2009 will be aptly described as "challenging times". So, let's consider some appropriate HR moves aimed at rightsizing a company (dealer or manufacturer) so they are positioned for long-term sustainability.

 

  • Avoid across the board staff reductions, such as a 10% total headcount cut. Rather, start by objectively assessing your entire organization's "manning chart". Account for every person who draws a paycheck and consider what he/she does for, and adds-to, your company.
  • Re-assess your business model in-line with current and projected market opportunities. For example, if forestry equipment sales have been a sizable part of your business, and if that market is in the tank, then check to see how you really want to be staffed for future profitability.
  • Consider new product lines and other strategic alliances to capture business in growth or profitable niche markets. Examples might include: scrap handlers, cranes, pavement milling or other recycling machines, specialized trailers, etc. However, these new lines often require the hiring and/or special training of sales and product support specialists, and you will want to factor these costs into your new line decision process.
  • Be courageous and develop a brand new org chart focused on where you want to go, and not what you've always done.
  • Objectively fill the org structure with your current peoples' names, making sure they can realistically do (or rapidly be trained to perform) per your expectations in the needed new role. Leave blanks where you know you do not have a current employee who is qualified.
  • Develop position descriptions for each key role. Please don't just brush-up old job specs, rather describe roles (without existing talent in mind) that will lead to success of the overall business.
  • Now is a great time for honest and thorough employee performance reviews…across the board. Start with key managers and have them spearhead the review process to every level. Be alert not to create a fear factor but let folks know this is "for real".
  • Develop an exit strategy for people who can not help you get where you know you need to go. Try hard to develop training and mentoring programs to optimize retention. Loyal workers are hard to find, so make "release" a last resort. As companies and jobs change, we probably all need varying degrees of skill set retraining.
  • Take a fresh look at your new org chart and hire to fill critical vacancies. Be selective and identify new hire training and development needs.
  • Maintain positive morale. If your culture includes periodic cookouts, sports outings, an employee recognition program, etc. then continue these relatively low cost activities. Be proactive in your leadership to prevent speculation, fear or panic. "Calm" is a good thing!
  • Communicate. Keep your people well informed. If handled properly, they will be encouraged to know that your organization is building for the future.
  • Use common sense…"trust your gut feelings". Most of the AED executives reading this column have built and/or grown your companies despite changing economic landscapes. You know the profit drivers and success factors, and you know your markets and your customers. We hope that you'll consider the above recommendations as additional tools to help keep your company strong for the long haul.