Tuesday, February 24, 2009

Demonstrate Value - Or Die

The level of panic in companies is getting almost palpable. They are cutting, cutting, cutting - and a lot of the time not THINKING about the ramifications of those cuts.

Some companies are cutting valuable IT staff, killing business-enabling (and enhancing) projects, and doing other stupid things like cutting benefits, reducing work hours and making the overworked people who are "fortunate" enough to be left behind after massive layoffs the most de-motivated group of people on the planet.

Yes, these are uncertain economic times.
Yes, in many cases, cuts do have to be made.
Yes, not every single project should be continued (or even started in the first place).
Yes, dead wood needs to be trimmed.
Yes, business does need to keep a careful eye on expenses and especially cash flow.

If you find yourself one of these "fortunate" few who survived (so far) - then here's a little tip to help ensure you make the next round of cuts: help your company to measure the contribution of your role/project/salary in terms of cash flow, tangible benefits and consequences if they kill it/fire you/lay you off.

At the end of the day no one knows your project/role like you do. And if you're working on a high-profile project or you're making a decent, livable salary - there's no doubt that you're in the sights for future "cost savings."

The time to act is now.

Step 1: Take a good look at your project/role and make a quick spreadsheet that lists all of the costs in one column and hard-dollar revenues (and when they'll occur) that you/your project influence. If the costs exceed the hard dollar revenue (or hard dollar cost savings) - then it's time to go to Step 2.

If your costs are lower than your hard dollar revenues (or savings) - then jump right to Step 3.

Step 2: Double check your assumptions and figures. If you're still coming up short - then figure out how much it will cost in time, money and resources to make the + side greater than the revenue side. If you're able to pull it out - then go on to Step 3. If you can't - then you should either be getting your resume polished up or make friends with someone whose calculations ARE in the black - and get re-assigned to that project and/or make yourself invaluable to the other person in their role.

Step 3: Share your work. Don't wait for bad news to "hit you" - you should take a proactive approach and share the information you've discovered with your boss (or executive committee or whomever you report to). Talk them through the numbers and show them how your project/role is adding value to the company.

It's not so much about cover your ass - as it is about being perceived as someone who cares about the company and cares enough to take the time to quantify it. I can guarantee you this - if there are 20 people/projects on the potential chopping block and you can cost-justify your project/role - then there will only be 19 projects/people on the chopping block and you will NOT be one of them.

On the other hand - if you can't wait to get out of where ever it is you're working - it might be a good time to keep your numbers to yourself. There might be a possibility for you to work with your current employer on a consulting basis - in which everyone wins.

Your company will reduce taxes, overhead, benefits, and conserve cash flow - while you gain flexibility, a solid project to start with, and an in-depth knowledge of the process and people involved in order to help ensure the project is successful.

Regardless of which way you go in the end - it's still a good practice to cost-justify what you're working on and what value you bring to the company. If you don't do it - chances are good that someone else (usually a bean counter) will - and other decisions will be made that are outside of your influence/control.

Change is inevitable. You can either make it happen - or have it happen to you.

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