Recent business history has been about efficiency. Even before the credit crunch and the recession(s) we in IT have talked a lot about “doing more for less” or other such euphemisms for cost reduction. Indeed Mark MacDonald at Gartner in one of his excellent blogs showed some recent data which demonstrated that aggregate IT budgets across the world have been flat in real terms since 2001.
One area where discussion would suggest we have struggled is in realising the benefits of change. While the theoretical benefits are sufficient to launch the change programme or project, somehow human nature conspires to prevent the benefits being fully realised. There appear to be two main reasons given for this: a) lack of buy in to the change by business units – who redeploy the savings made in one area to relieve pressure elsewhere; and b) a lack of alignment in governance such that in a decentralised organisation the benefits are apparent only in the centre or vice versa. So often in business the person who does the work isn’t the same person who gets the benefit. That applies to teams, divisions, business units and geographies too. And it’s causing a problem.
To these reasons I would add a third – my own conjecture – that cost reductions and attendant headcount reductions have made change very difficult because individuals now wear so many hats so that there are many unique roles which are incapable of being disaggregated to the point where the work can be easily reorganised. This has its limits of course – the problem lies within the pool of knowledge workers and specialists who are the sort of people who are expensive and likely to find their expertise under question. They are subject of discussions about the need to systematise, or share knowledge across the organisation in some more efficient manner – like from within a shared services organisation.
These people no longer do one job (although they will have one job title – possibly one disconnected from the reality of what they actually do). But they are not thought of as a luxury, instead they have accreted work as the previous (full time) holder was not replaced in the last efficiency project.
Organisations think about functions or tasks and expect to reduce FTEs on the back of efficiency initiatives and fail because the activity is spread so thinly across several people, all of whom have a more important primary task which should not be removed, and is different in each case.
Only a few days ago I was with a FTSE 100 CIO who was concerned that a central initiative he wanted to support for his CFO would increase costs rather than generate the savings they both wanted because the heads that would be reduced in what is a decentralised business would turn out to be illusory.
Embedded in the term FTE is a partial understanding that we are not talking about real people, just a part of their role. But FTE becomes impossible to manage when it is spread across too many real individuals. This is where the expertise resides, not in neat accounting units but in real people’s heads, people with experience and other things to do as well. Knowledge management recognised that, but failed to offer any convincing ways to capture that knowledge other than by use of directory services so you could find the knowledgeable person quickly.
Kant suggested that cause and effect are only constructs of the mind. But the difficulty we have caused with partial change historically has created the effect of people wearing too many hats and is all too real.
The full answer lies in a bigger project than most want to undertake. It lies in the “lean thinking” world where all activity that does not benefit a customer is stopped. It lies not in partial change but in systematic change; dare I call it process reengineering for knowledge workers? This is not easy, especially as it is coming on the back of wider changes that drive greater individualisation. But it is where efficiency will have to come from now that process workers have delivered their savings and FTE reductions.