Austerity set Local Authorities a very big challenge how to get smaller without too much pain?
You can shrink people as in the film Downsizing , this solution turned out to have its problems your money goes further but if your income is reduced then low pay, poor housing, inadequate health care and discrimination remain. You can shrink resources as in the Monty Python solution to the housing problem by significantly lowing the ceiling in tower blocks so as to squeeze an extra floor in between every other floor. As yet the first approach is science fiction the second is “a very silly idea” .
Downsize. It seems the obvious way to reduce costs but it’s not with out challenges and sacrifices.
Senior managers went from salami slicing budgets to make lots of small savings to radically downsizing the whole organisation service by service. The usual ways of making small efficiency saving work if the target is 2 or 3 % but when the requirement turned out to be 50% then major innovation was required.
Downsizing and Major innovation had big implications for HR in managing the reduction of the workforce and introducing less favourable terms of employment. This has proved painful for employees.
Downsizing was painful for those who had a service withdrawn or were no longer eligible for the reduced service. And painfully for local politicians as they were left with no option but to make unpopular cuts.
Because managers did not know how to get smaller without causing too much pain MBA courses now feature a module on Innovation and Downsizing. Managers swop stories about what went wrong, discuss how it could have been done better, read up on the theory and maybe a crossover with the ethics module!
Blair Mcpherson former Director, author and blogger www.blairmcpherson.co.uk
