John F. Kennedy said that “Change is the law of life.” His thoughts certainly are appropriate for the current state of employment in the US. We have seen such dramatic changes since the “Great Resignation” in 2021.
During 2021, we experienced record breaking changes in employment. In fact, 2021 delivered the highest average on record for employees leaving their employer, which equated to an average of 3.9 million resignations each month.
In contrast, throughout 2023 we’ve seen headcount reductions across all business sectors. Time Magazine reports that close to 172,000 people have lost their employment in the tech sector alone. Other organizations such as Disney, Blackrock, Goldman Sachs, Bed Bath and Beyond, and many more have also reduced their headcount significantly.
You may be thinking these data points really aren’t that interesting or you may be thinking this news really isn’t that important.
What these staggering numbers do not address is the impact that significant attrition or staff reductions can have on an organization. When organizations lose experience, knowledge, and expertise in large numbers, most organizations have a difficult time maintaining or even regaining their momentum, let alone meeting their annual business objectives.
There are numerous steps organizations can take to help reduce this type of impact and support their ongoing momentum. One suggestion that we will focus on today is the creation of an Enterprise Project Management Office that will provide:
Executive exposure to strategic programs and projects
Focused support and consistent reporting with the intention of improving outcomes over time
Consistent methods and processes for approving, initiating, staffing, and implementing programs and projects
The structure of an EPMO provides visibility, knowledge of the strategic programs across the organization, and a clear set of methods and processes for teams to follow. All of these are key areas that help prevent loss of knowledge when an organization is facing a high attrition rate.
Additionally, an EPMO can provide guidance on how to implement cost reporting in an organization and to build upon that reporting, can help identify and measure areas of cost savings. An EPMO is often the right organization to assist with data-based decision making as well.
These types of consistent processes and knowledge sharing are key to supporting an effective operational structure that will provide the support needed to achieve business objectives.
If you would like to learn more about how to implement a successful Enterprise Project Management Office in your organization, you may want to work with a small team, with deep expertise and real experience, to help you create the desired outcome.
While many business fundamentals remain robust, it is fair to say that the global economy isn’t exactly thriving, and chances of at least a mild recession in the near future are high.
However, this doesn’t mean you have to give up on growth! There are multiple potential strategies that can help your business grow and prosper during a recession. Here are just a few you should consider:
Strategy 1: Increase Marketing
To save money during a recession, many companies reduce Marketing spend. However, historically it is the companies that don’t cut their ad spending during a recession, but in fact increase it, that fare best during the downturn and that also bounce back strongest.
If all your competitors are cutting their budgets, and your business is increasing and fine-tuning its marketing efforts, then your business could win new customers and sell more to existing clients by being more aggressive.
Furthermore, during a recession you can often get more “bang for your buck” in terms of marketing spend. When competitors slash their marketing budgets, consumers will be less likely to see their marketing efforts, while at the same time seeing your presence and messaging even more frequently.
Bottom line: Don’t cut back on Marketing spend, increase it! Recessions are a great time to improve market share and achieve greater marketing return on investment at lower costs than in good economic times.
Strategy 2: Focus on your best customers
A recession is the perfect time to segment your customer base and market, and to focus on your most productive and profitable customers.
Take time to analyze your available data and balance the short and long term. Who are your best customers now? Who has the most potential? Look at channel, mix, and margin, as well as just revenue and profit. Think about lifetime value (how valuable they will be to you over the full lifetime of your relationship with them).
Recessions are also the best time to consider cutting or addressing difficult, unproductive, or unprofitable customers. After all, they’re either costing you money or there is an opportunity cost in spending time on them versus easier to work with, more profitable, more productive, or higher potential clients.
Finally, it is important to remember the old adage: It costs ten times as much to recruit a new customer as it costs to retain an existing one.
Customer acquisition costs have generally been getting more expensive, but recessions make it even more costly.
Therefore, making more out of the customers you already have, and reducing and eliminating customer defections to competitors, or other causes of “churn”, are smart things to do during a recession.
Strategy 3: Raise the game in pricing and portfolio management
If the last couple of years of historically high inflation have taught us anything, it is that almost all companies could be better in the discipline of pricing: even “high performers” in pricing management still have opportunities to unlock additional value through more data driven approaches.
Companies can enhance their understanding of pricing by mining past transactions, performing customer segmentation, and analyzing preference, win rate, and competitive pricing data. These insights can then be used to dynamically manage pricing or customize and evaluate pricing for individual products, services, contracts, or deals.
Equally, during a recession, the best companies also replace broad-based price changes with strategic changes to either grow revenues or protect / grow margins.
During a recession, companies have several pricing strategies at their disposal. These include exchanging price for value, providing additional benefits like volume guarantees, bundling products and services, adjusting service levels, or passing on surcharges for customer behaviors that result in revenue or profit loss.
In a recession, smart companies also modify and streamline their product or service portfolios and offerings to optimize “mix” and best match supply and demand.
Examples of this include changing or eliminating product or service families based on cost structure, complexity, or strategic fit, and migrating customers to other (more profitable) items.
When done right, these moves can deliver streamlined operations, increase revenue, and lower costs as well as increase customer loyalty and growth.
Strategy 4: Communicate your value to customers
Demonstrating your value to customers is important all the time, but especially so during a recession.
In times when customers are reevaluating their budgets and considering changes in their buying patterns, it is crucial to remind them of your value. This can be achieved by presenting hard facts and compelling data that support the benefits of your products or services, as well as their returns on investment. By doing so, you reinforce your value to customers.
At the very least, having conversations with your clients about this will flush out their concerns and intended decisions. This allows you to work with them and come up with strategies to maintain and even grow demand by identifying solutions to the issues and opportunities they raise.
Strategy 5: Scale Automation
Despite the current economic headwinds, many businesses and industries are still struggling with labor shortages and skill challenges.
Equally, companies that emerge healthier from recessions typically reduce activities that are performed manually and eliminate unnecessary or nice-to-have activities. In turn, this optimizes organizational and operational efficiency and effectiveness through enhanced and increased automation.
Scaling automation reduces costs, improves resiliency, frees up scarce human resources, and creates fuel to invest in key priorities.
We have been encouraging our clients to consider scaling automation within their businesses to address these issues that are drags on their revenue and profitability potential.
To achieve success in an automation program, companies should focus on the following:
Strong executive sponsorship
Ambitious automation goals
Clear pipeline of opportunities
A well-defined change management plan
Solid governance structure
Effective delivery capacity
A plan to redesign work to realize automation value
A system for tracking benefits
Done well, scaling automation can unlock significant growth!
To achieve growth during a recession, consider the following growth strategies:
Focus on your best customers
Raise the game in pricing and portfolio management
Communicate your value to customers
Growth during a recession is possible.
Core Catalysts is full of experts in growth strategy, helping our clients grow both their top and bottom lines.
There are so many challenges when an organization decides to setup a Project Management Office (PMO). These challenges range from strategic to tactical, theoretical to practical. The question is how do we implement an effective PMO?
Understand Your Environment
It is essential that you understand the environment in which you will be setting up an effective PMO. For example, does your company produce software? If so, you may be best served by setting up a PMO that leverages an Agile framework and methodology. Maybe your company is service related? In that case, it may be beneficial to setup a PMO that leverages a Waterfall/Phase-gate framework with an Agile methodology.
Regardless of the framework and methodology that you choose it is imperative that you consider the skillsets that you have in your organization. There are a few questions to consider:
Does the PMO have top-down buy-in?
Have you properly prepared leadership for the setup of a PMO?
Does your current staff have the appropriate skillset?
Will current staff require additional training?
Will you need to hire on new staff/roles?
Crawl – Walk – Run Mentality
There’s always room for improvement, and you will always need to mature into that improvement. Regardless of where you are in the project management maturity model, it is important to remember that you must crawl before you walk, and walk before you run. This expectation must be set early and reminded of often. Too many times the perception is that the PMO will solve all of an organization’s woes. This simply isn’t the case. The implementation of a PMO will definitely help certain aspects of the initiatives that an organization undertakes, but to be highly effective takes maturity, and the cost of that maturity is time.
Crawl: Standardize and Improve
When first learning to operate a PMO, you’ll want to focus on two critical components. First, standardize the way you plan and execute your projects. This is commonly referred to as your framework. A good foundational framework is key and will ensure that everyone understands how you, as an organization, will plan and execute your projects.
Some great elements of a solid framework are standardized projects and program governance. This covers things such as how to scope a project (what is and isn’t included), how to manage risks and issues, how you manage change, and even how you will communicate. Setting these foundational elements up front will allow you to mature your framework and methodology to best suit your organizational needs and wants.
Walk: Improve and Increase Efficiency
Now that your PMO has mastered the basics, it’s time to mature the model. You have some experience under your belt and this is key in advancing your maturity level. For example, you may have now moved through several projects and know how your organization likes to communicate. Take this experience and refine your Communications Management Plans to fit the needs and wants of the organization. Perhaps it’s time to become more efficient and accurate on the estimation side of a project. There are tools and techniques that you may want to help you in maturing your ability to estimate project duration and cost.
You have near-infinite options on what you choose to mature, but keep two things in mind as you do. First, you’re always going to be refining and maturing the model. Doing so only makes things better for you and your organization. Second, if at first you don’t succeed try, try again. Yep, that old adage was bound to come up! Not everything you try will work, but don’t give up.
Run: Refine for Optimal Efficiency
There are a ton of PMO maturity models out there on the world wide web. I’ve used many of them and can say that some are good and others are not. What I can say, definitively, is choose the maturity that is right for you and your organization. Some organizations need a ton of structure while others require more flexibility. Finding that sweet spot and optimizing it is the key to success.
Encourage everyone to keep their eyes open for waste. Even in highly mature models, it isn’t uncommon to find waste. This typically manifests itself in wasted time. For example, if your project managers are creating a project artifact that is used only in the rarest instances, perhaps it is best to reevaluate that document. You may find that you can identify the types of projects that the artifact is used in up front, and create it only for that project type. The opportunity for refinement and operational efficiencies are boundless.