Can't Cut Your Way to Growth

Updated: Mar 15

A healthy business can solve an important equation that faces all of us in business. I call it the Work Product Equation. The equation is:

There are many variables to work in this equation to realize the results you want. You can reduce the amount of work…or do it in a more efficient way that reduces the number of hours. Importantly, and even better, you could also stop doing non-value-added activities. On the time variable, you can elongate the desired timeframe you wish to accomplish things.

The real variable that is often not managed well is the resource piece. I often see not enough resources, too many resources (if you can imagine that!), and not the right resources. It is this last piece that I want to spend some time on as it is a game-changer.

There are so many cliches that come to mind with this topic… “you get what you pay for,” “takes money to make money,” etc. There is a reason why these cliches are used. They are true. As it relates to the Work Product Equation, who sits in that denominator makes all the difference in relation to being able to achieve great things.

Here’s a simple example. For my horse business, if I have someone who can clean twice the number of stalls in the same amount of time as someone else, I need half the amount of people - simple math. The same is true and even more so for more complex roles where the top talent can bring is exponential.

Here is where we need to pump the breaks on the idea of top talent. Top talent usually costs more. Believe me…I get the concept of making payroll as the CEO of two businesses. It is a truly horrifying exercise every other Friday! But… the stark reality is my business success is limited by the quality of talent I have employed.

When companies want to grow, they need to be very careful of having a mindset about cutting G&A (expenses) or maintaining it. There is a cost to growth. As we say in my house ALL the time, if you want to do big things, you must do big things.

A very well-known, global consumer package goods company was bought a while back by a company that was known as a cost-cutting machine. They cut the top 1,000 officers of this company, even though the company was recognized for strong performance. This company had 25+ quarters of consecutive and tremendous growth. The analysts in the industries heralded this company because of the strength and impact of its leadership. This new owner also cut all people’s development costs. Fast forward a few years…guess what? Yes, you know it…they have imploded.

Many around me have often heard me say that organizations are perfectly designed to produce the results they are producing. If you want different results, you need to change things. The best place is to invest in your talent. Top talent wins the game all day long. Don’t fall into the trap of being “cost-effective” on your talent strategy. While we should always be prudent about spending money, highly effective businesses hire top talent and don’t try to cut their way to a growth strategy, especially regarding talent.

Janson Associates has vast experience helping organization find, develop, and retain their talent. Get in touch to learn more about how we can unleash potential within your organization.