Adjusting to an Economic Slowdown

JoAnn T. Hackos, PhD
Director, The Center for Information-Development Management
http://www.infomanagementcenter.com


Planning is an unnatural process; it is much more fun to do something. The nicest thing about not planning is that failure comes as a complete surprise, rather than being preceded by a period of worry and depression.

Sir John Harvey-Jones


What are you doing to respond to the slowdown in business activities? How is your company reacting? Layoffs? Benefit cuts? Project cancellations? Slower release schedules? Reorganizations? We’re watching the trends closely and providing the assistance that CIDM members request to help them make sound business cases.

Last summer, we conducted a comprehensive survey of business practices surrounding staff resources. We learned that most managers were looking for ways to retain valued staff and recruit in a sellers’ market. This year we are working hard to update the data. To help with the update effort, please complete our latest Zoomerang survey.

In preparation for the October Best Practices conference, we want to know how you and your organization are being affected by and are responding to the slowdown.

In a recent conversation with Roger Masse, manager of the STC society-level employment committee, we learned that May 2001 was markedly different from May 2000. Last year, the employment booth at the STC annual conference was filled with job listings but there were no takers. This year, the tables had turned— lots of job seekers and few openings to be found.

Here are a few trends we’ve noted. We’re concerned, however, that many choices are poor ones, choices that threaten the capacity of information and training developers to snap back when the economy improves.

    • The pressure is on headcount. To improve the stock analysts’ assessments, companies are focused on reducing the payroll. That means both eliminating contract positions and laying off permanent staff.
    • Reorganizations continue to be the typical response to problems at home. When in doubt about how to solve problems, reorganize and perhaps the problems will go away. For communication managers, the pressure is once again to fight off decentralization. Fewer middle management positions and tighter cost controls in the hands of business-unit managers result in moving writers into the product-development groups.
    • For the past ten years, few opportunities existed for independent information-design organizations to handle whole projects. Most of the design and development work remained in house. In a recent reversal of course, managers tell us that they’re looking for vendors to handle whole projects externally. External projects, rather than contract employees, help reduce headcount. The problem for managers is that few companies remain that know how to design innovative communication.
    • Outsourcing entire information-development departments is being considered in many beleaguered industries. Outsourcing the staff, not just the projects, is the ultimate headcount weapon. Vendors handle payroll, benefits, even project management. However, they’re not selected for their design expertise but for their ability to handle large budgets. Why outsource information development? When executives outsource, they fail to recognize information development as a core skill. Outsourcing may not reduce costs, but the stock market views it favorably.

As we have seen in every other economic slowdown, travel and training budgets are the first to disappear. Companies make poor short-term choices without regard for their future impact. It is smarter to invest carefully in staff growth and be ready when the economy turns around.

  • The same goes for investments in new technology, particularly content-management solutions. We find numerous projects being postponed indefinitely or cancelled outright. Although budget considerations are important, the slowdown provides you an opportunity to prepare your information for content management and single sourcing.
  • When budgets are tight, metrics increase in significance. Responding to the need for cost controls means knowing what your projects cost in the first place. You need to know how your development dollars are being spent, whether each expenditure is justifiable, and if unit costs can be reduced further. At the same time, you are asked to prove your value by calculating return on investment.
  • No less work to do but fewer staff to do it—is it a trend or a continuing reality? How do you respond? Smarter or harder?

Remember to make your plans (and get your budget in line) to join us at the most productive of all our industry conferences— Best Practices 2001 in October. Learn more about the trends and how your friends and colleagues are choosing to handle them.