How to right size your organization

Many companies faced layoffs during the past year as the economic downturn continued.

If your company was one of those, you may soon find yourself facing the other issue of deciding who or how many people to bring back.

The question “What is the right size for my organization to be?” is an important one – and sometimes a difficult one to answer.

The value of your company is directly affected by how productive your employees are – more productivity generally means more profitability. If you want to maximize value, you must right-size the organization.

Right-sizing means having the right number of the right people in the right jobs to accomplish your company’s goals and objectives. With that concept in mind,you should “Begin with the end in mind,” as business writer and consultant Stephen Covey would say.

Your company’s goals and objectives

The downturn may have drastically altered your company.

You may have repositioned yourself or changed product lines or markets to make it through the tough times. Now may be the time to think about what you want the company to be in the recovery.

Do you want to continue with the strategies you adopted last year and make them stronger, or do you believe the recovery offers you the chance to accomplish something totally different?

Define your goals in terms of customers, product or service lines, brand positioning, employee satisfaction and profitability. You’ll need to be clear on each of those to go to the next step.

The right jobs

What infrastructure does your company need to accomplish the goals you developed from the last step?

If you’ve decided new products are the wave of the future, you may need to beef up your research and development department.

If you think customer service will be the brand differentiator for your company, your service and sales department may need to change.

If speed to market is critical, your order, manufacturing and shipping processes may need to be expanded.

Flow chart what needs to happen to achieve your goals, and then break those processes into functional jobs that make sense. Use reasonable skill sets and maintain adequate controls.

Research best practices in your industry to see how each job can be done most efficiently, and plan jobs to take advantage of those ideas.

The right people

Once you’ve defined the jobs that need to be done, you need to give some thought to the kind of people who could best accomplish those jobs.

What skills, education and experience would they have? What temperament or behavior style would make them best suited to that type of work? How will you screen potential employees to see if they fit what you need?

In other words, will you know a good fit when you see it? Get your selection process in place so that you can put the right people into the right jobs. This applies to your current employees and any new ones you’ll bring on. You want to plug people in where they can best succeed, not set them up to fail.

The right number of people

This may be the toughest question of all. How many customer service reps do you need to handle 500 customers? How many billing clerks do you need? How many salespeople will it take to reach your goals?

Determining the answer isn’t purely scientific, but some data can be used to help you with these decisions. You can find that data in a number of places including your own historical records.

For instance, by using your accounting and payroll records, you can determine how many man hours you spent to produce a certain outcome (invoices produced per clerk, clients brought in per salesperson, etc.)

You can also pull information from your trade association on many of these data points. Check the association’s website or call to ask if the association compiles such information and if you can gain access to it.

As always, you must use a little common sense. Your company isn’t just like anyone else’s, and your way of doing things may require fewer or more people as a result. But using this information can help you get a ballpark read on your staffing plan.

 
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