It’s a tricky act, and sometimes perfecting it comes through difficult lessons.
Many firms have learned since 2008 how to operate at optimum efficiency without sacrificing quality. For certain, it was a painful transition for many. But many executives we talk to say it’s been a valuable exercise.
As we lumber toward a recovery that will surely come to pass at some point, the balancing act shifts a bit.
Consider the following scenario:
Company A hires Company B to provide a valuable consulting service. The two companies have worked together for almost 20 years with very few serious issues arising along the way. Company B is a reputable firm with a long history and a successful track record and has already undergone extensive restructuring efforts in order to keep business running smoothly and within budget restraints.
However, in recent months Company A has noticed several instances of less than quality work coming from B, including slow response time, missed deadlines, and even the occasional error or inaccuracy in a project. The staff at Company B seems to be scrambling and constantly apologizing. Company A’s level of dissatisfaction rises to the point where a meeting of the minds occurs to determine whether or not this relationship can continue.
Again, assuming B has exhausted their resources in terms of internal organization, process refinement, etc., it now has two choices:
- Risk losing a client
While it may cause short-term strain on firms, we believe in the long-term this challenge will become more prevalent and will ultimately be a good thing. What this scenario represents is the scale tipping to the other end.
Lean staffs are no longer able to handle any increase in volume. It may not be a shocking or even noticeable rise based on the sluggish improvements we are seeing across the board, but over time we believe firms will be pushed to expand their workforce or risk losing business to a competitor.
As hiring picks up, voila, the recession will be over!
Well, perhaps it won’t be that easy—and all signs point to the fact that it won’t be a quick change. Yet this shift in balancing lean operations and quality service standards will ultimately create more jobs, which is a major key to sustained recovery.