Cost Cutting Tips when laying off employees in a social media world

The economic downturn has resulted in a number of companies being forced to use layoffs as a cost cutting measure. In a world where anyone has access to the internet and can publish negative feedback about their former employer, and does, how you manage this process is critical. It takes just a second after someone has walked out the door for them to post negatively on Twitter, facebook or their blog, and it spreads from there. This will have major impacts on employers for years to come. Blog posts, tweets and video content all remain in search engine caches for a very long time, if not forever!

Here are some tips to avoid these potential problems in a social media world:
1. Make sure you have a plan and that the plan ties directly to the overall business plan for the company. You don’t want to lay off the wrong set of people.
2. Remember the jobs you are cutting have people in them. Treat them with respect. This could be you one day and if you don’t do the lay off correctly, it probably will be you and soon.
3. Be open and fair from the start. People want to feel valued particularly in tough economic times.
4. Do it quickly. It only causes pain to the employee and the company to drag it out. It also provides more time for the former employee to publish negative articles or posts.
5. The employee reaction may not be rational or logical, based on information given to them. They will instead fit the layoff to their own experience or what they have read elsewhere. This usually means they will react poorly, initially. Providing the employee with additional support can also make the experience more positive.
6. Provide employees with some advice about being careful if venting online. The perspective can help avoid legal battles in the future.
7. Expect things to be blogged, tweeted, and generally discussed by current and former employees. Monitor the internet to see what is being said. Allow people to vent but if needed, gently correct the messages if they are blatantly wrong.
8. Communicate with the employees who are leaving as well as with those who are staying, but do so honestly and openly.
9. Setup an internal wiki to allow the people leaving to document their knowledge in a central location. This way you might collect some of the knowledge that is leaving before it leaves.
10. Communicate to your customers, suppliers, media, analysts and blogosphere what is going on and why.
11. Highlight the other cost cutting measures that the organization is taking to show layoffs are one of the last resorts.
12. Make sure you pay severance packages fairly and on time. If you fail to do this, you can guarantee that the company and you, personally, will have VERY negative press.

Most of these are common sense and you may already have done them. Good for you. If not, call us and we can help. We have experience in all of this.

Thanks

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Merry Christmas

When I'm worried and I can't sleep
I count my blessings instead of sheep
And I fall asleep counting my blessings

When my bankroll is getting small
I think of when I had none at all
And I fall asleep counting my blessings

I think about a nursery and I picture curly heads
And one by one I count them
As they slumber in their beds

If you're worried and you can't sleep
Just count your blessings instead of sheep
And you'll fall asleep counting your blessings

Many of you will recognize the song above from the movie White Christmas. This has been a favorite movie of our family for many years. Among other elements it tells of love, loyalty, celebration and the ability to find a way through hard times. It encourages hope. We are thankful for hope. It is difficult to crush this feeling more than just temporarily. Somewhere, deep inside, is the belief and anticipation that things will get better. And while not everything works out the way we want, things do get better.

Although this year has been a tough one for many of us, looking ahead are better times. Hope!!!. We are grateful that our family members are all relatively healthy and that communication abounds, even though great distances separate us. We are blessed with amazing, wonderful children and grandchildren.

The Christmas season joyfully celebrates the birth of Christ. In addition to this miracle, it brings with it renewed friendships and the exchange of glad tidings among friends and family. We are thankful we live in a country with freedom, opportunity and almost unlimited resources. We are privileged to have strong family ties based on love and respect. We cherish you, our wonderful family and friends, who bring us spice and affection and we appreciate the magnificence of our lives more than ever before.

As we move from Thanksgiving to Christmas, our sense of thanks increases. We are also blessed with the greatest gift of all, Jesus. May the love of this gift surround you and all close to you during Christmas and throughout the coming year. God bless us everyone!



John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Cost Cutting Balance

Cost cutting, cost reduction, consolidation or cost management have become central planning topics in all competitive markets. Most companies have trimmed all the fat and are working “close to the bone.” New companies have either gone out of business or have cut back on plans, dramatically changing the business model with which they launched. An established company in a maturing market is likely to see the best return from cost cutting.

As we have written many times, having the right plan is critical for all companies.

While cost cutting and basic survival is at the top of each day’s agenda, it has to be balanced to some extent with spending/investments that will grow the revenue line. This is typically a mixture of selling more to existing clients (market penetration) finding new clients both locally and internationally (market development) and extending your brand’s equity creating new profitable products and services (product development). This isn’t new but is almost completely overlooked with the focus on cost cutting. Success in managing the costs can improve cash flows which can be used to invest in building revenue.

The news is full of stories about companies that have sought a major, single solution, with the obvious “nuclear” option of outsourcing and/or dramatic cuts in personnel. This has surface advantages, but often creates crucial competitive problems such as:
• Undermining core competence
• Decreased speed of response to market demands
• Increased problems of quality control
• Decreased customer service and resulting reduced customer loyalty
• Elimination of product support and upgrades

Often, companies by attempting to make big changes miss the advantages of applying a continuous cost management discipline. A step by step approach will create an environment where cost management is continuously incorporated in company decision making. By making cost cutting and then cost effective spending part of the culture, the resources can be much more effectively utilized to drive revenue on an on going basis.

We recommend developing the right plan, of course. The plan has to have a balance, using the funds to drive revenue. Without the revenue, the company is doomed.

Let us know how we can help. We are experienced in helping companies thrive and not just survive.

Thanks

John



John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Cost Cutting – How’s that working for you?

It’s not just Dr Phil. who is asking the question, “How’s that working for you?”

We see cost cutting almost everywhere as companies attempt to pare back to salvage some of their profits. We see the dramatic reductions in force and the increases in unemployment numbers. We see the projects and initiatives being half funded and abandoned and know that the result will be substantial revenue losses in the future. We see the scramble to reorganize with the lower level of resources. Yet, we see expectations of output remaining high.

And we ask, “How’s that working for you?”

For most companies, the people leading the cost cutting are the same people who have led the business and their expertise is not in the cost cutting and re-planning. The most notable in the news today are the big three automakers. They have great plans to cut people and shut down plants and are underway with their actions. How do you think they will do? Do you have great confidence that they will choose the right plan and put best practices into play? The stock market doesn’t think so and is hoping that when the government comes through with the bailout, a government oversight group will be appointed too. For those of us in the business world, that is clearly the blind leading the blind.

How’s that working for them? Not well!

It’s not just the huge corporations who are scrambling. Many small and medium sized companies are struggling too. They are doing their best to cut costs and stay alive and many are failing. Additionally, they have lost their focus and are no longer operating as a unified organization.

How’s that working for them? Again, not well.

With all of the money that is being spent in the cutting of costs, one would think that some of it would be allocated to bringing in some cost cutting expertise. These resources have the knowledge and the experience in cutting the right costs and then refocusing the company to use the remaining resources in the most effective and efficient manner. Unfortunately, this expertise is viewed as a cost in and of itself and cut first. In reality, it is the best investment that could be made since it can return its value many times over.

We have written a number of articles on best practices for cost cutting and the best implementation programs. They all start with setting up the right plan based on the company’s goals and objectives and scaled according to the resources available. It is this planning and then the execution of the plan that is so critical. Properly done, not only will the company be able to survive the economic downturn but be in a position, with its best people intact, to move forward when the economy improves.

How’s that working for you? If your response is not, “Its working well,” then contact us. We can help.

Thanks

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Cost-Cutting Tips for the Small-Business Owner

Cash flow is important for any size business, but particularly so for small business. Small fluctuations can mean the difference between making payroll and going out of business. The downside penalties are severe. Hence, one of the keys to running a successful small business or home office is learning to control costs and in this economic climate, cutting costs. Even the smallest expenses can quickly add up, cut into profits and turn into losses. Many small business owners know where their money comes from, but are not as clear on where it goes. This can have a significant impact on their business cash flow.

Here are 7 tips for small business owners to control and cut costs.

1 Review your expenses regularly. You should do this in detail at least once a month and on the major areas once a week. It is critical that you do this personally. While your accountant or financial manager may assist, this is the lifeblood of the business and needs your personal attention. What gets inspected becomes what is expected.

2 Buy last year's model of furniture, computers, PDAs, phones etc. There is always something new with more bells and whistles. Be careful that you don’t get misguided into “needing” what is hot. With all the new models there will be something old. If you wait until the end of the year or for sales throughout the year, you can save on your office needs.

3 Buy in bulk and buy ahead. By buying commonly used items in large quantities, you can save a great deal. Replenish your supplies before you run out. Thinking ahead, and thus buying ahead, gives you a chance to comparison shop and take advantage of sales.

4 Buy store brands instead of national brands. In many instances, these brands are manufactured by the national brand companies but don’t carry the large marketing and sales overheads. Having spent the bulk of my business life with national brand companies, I can tell you that the current quality of many products is excellent. These can offer savings of 10-20%.

5 Take advantage of discounts. Professional and trade associations often offer their members discounts on insurance, travel, shipping and other common expenses. Similarly, some credit cards, like the American Express Corporate Card for Small Business, may get you discounts as well.

6 Save on direct marketing costs. Mail costs for your business can add up fast. To save money, use postcards or consolidate shipping. You also can buy or lease a postage meter or get a mail scale to eliminate overpaying. If you send out much direct marketing materials the savings can be substantial. There are also companies that pick up bulk mail, sort it and deliver it to the post office and still save you money. Check it out.

7 Save on employee costs. For most firms, this is the largest or second largest expense next to the product costs. Consider temporary help or contract help. While the hourly rate may be higher, you only pay for the hours you use. This can bring with it expertise that you don’t have and training that you don’t need to do. Finally, the benefit costs are eliminated.

If you run a small business, take a look at these ideas and let us know how much you save.

Thanks

John
John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Social Media and ROI

Traditional media broadcasts brand messaging to customers via interruptions in programming – TV and radio commercials, magazine ads, billboards. The expectation is that reaching customers enough times with a message will cause them to buy more products or services. While this has been the norm for a long time, it is based on one-way communication. It doesn't listen to or engage the customer by letting them participate.

Social media offers businesses an opportunity to start conversations with their customers about their brand. It lets them ask questions, get feedback, solve customer problems, and find new product ideas. It reaches the customers where they live on Facebook, MySpace, Twitter, Blogs, Wikis, RSS feeds and Podcasts. Social media allows business and customers to create a brand together. Hopefully guided by the company but not dictated.

Many companies are starting to get the message that social media is an effective way to reach more of their customers. MarketingSherpa shows that marketers are significantly increasing their spending on social media (Web 2.0) while at the same time drastically cutting their traditional media campaigns. In a down economy, the technologies in social media help companies cut costs and still see their customer base increase.

Every executive wants to know what ROI might be expected from diverting funds to social media instead of traditional media. My good friend Lewis Green of L&G Business Solutions has written a great article Don't Say ROI Unless You Mean It. It explains ROI and Value including the aspects of social media that contribute to them. We would follow that up with some data in support of it in the following Survey says: b2b marketers see ROI in social media. Request the full study.

Most executives are new to this medium. Most need expert help to get started and to create the right strategy and plans. We recommend Thought Labs, a technology innovation company, that has had great success with several social networking platforms such as Facebook and Bebo. They have translated their expertise into building a strong stable of clients who seek to utilize social media as a means to drive business success.

Social media is the wave of the present, not the future. In these tough economic times as companies struggle to get profitable and stay profitable, cost effectiveness is paramount. We can help your company cut their costs and improve the profit picture. Social media is just one way.

Thanks

John


John Maver
President
Maver Management Group
(925) 648-7561
Maver Management