The Impact of Cost Savings on Workplace Culture

The Culture around here has to change! We hear this from executives over and over again. Why? First let’s start with market dynamics.

Are these things happening to your company or industry?

  • Change – the demand for more and faster
  • Globalization – competitors not just around the corner but around the world
  • The Internet of Things – systems of systems and complexity that hurts the brain
  • Is someone trying to Uber you? Are you trying to Uber someone else?

Our continued experience at 1-degree is that these phenomena are demanding more of our clients. Specifically, what shows up is a demand for more and better teamwork and collaboration inside and outside the company.

Struggling to grow your bottom line by managing your costs? You are not alone.

Companies who are searching for the magical elixir of growth are like a start-up searching for the new pattern of success – something they can rally behind and invest in fully to drive growth and profits. These organizations show up on our doorstep asking for culture change. And rightly so. The culture that sustained them through the last cycle of fast growth became grounded in systems, processes, job descriptions – every activity that supports repeating a pattern successfully.

At some point the engine that fires up growth runs out of steam. This is when the search for something new takes on vital energy. And this is where the problem begins. As top line growth slows down executives are able to still grow the bottom line by managing costs. If top line growth slows dramatically cost control becomes relentless. For businesses in the information economy, labor is the biggest cost followed by information technology closely followed by office rent.

Strategies Being Used to Reduce Labour Costs

Driven by a desire to lower office expenses companies are using a combination of two strategies: Work from Home and Benching.

Work from home has become a popular strategy because the pervasive internet allows us to do many, if not all of the same office tasks from home. And with so much time being spent on conference calls or skype meetings, it doesn’t really matter if you are at home or in the office.

Benching is the new style of office layout that was first adopted by Tech companies. Benching involves long rows of tables like you find in a library with no assigned seating. When people come into the office they find an open spot and make camp for the time that they are in the office.  Proponents of this format claim that teams configured as such are more collaborative.  But are they?

Are these strategies working?

Organizations who are struggling to find the new pattern for success often discover that collaboration has to be taken to new levels.  No one person has all of the answers.  New theories, offers, products or concepts must go through rigorous reviews and much discussion/debate before they are ever ready for prime time.

Sending people home, and having them try to do this tough, ground-breaking work while on a conference call is crazy.  When a sales person comes back from a prospective client who might be interested in the new thing that might transform your business they have to be surrounded by a pack of hungry wolves looking to find any bit of meat that can be eaten.  Instead, this new office is a space of occasional workers where trying to connect with someone working offsite, in another time zone or on flex hours is super challenging.

Let’s be clear – the idea of creating new office formats or having people work from home is not the problem.  But, when taking cost out is the driver little things get missed.  

Fundamentally, the largest cost in today’s information economy is people!  The productivity of those people is the greatest source of leverage and choices about office configuration, work from home and conferencing technology should support the productivity strategy and in particular the need for more and better collaboration!