Cutting Costs? Leading Change? Start At The Top

My client, Jake Kincaid, headed a pharmaceuticals firm in Japan when I worked as his consultant on workplace issues.

He wanted to implement cost-cutting measures, and he told me he couldn’t understand the Japanese people who worked for him. The company’s employees were resisting change, he said. He couldn’t get them to fully implement cost-cutting measures. How come?

Look At The Small ThingsJake had overheard a group of employees complaining about his full time driver and limousine—one of the perks of his job. The car would pick him up at home in the morning, take him to appointments and take him home at night. The driver would sometimes take Jake’s wife to her yoga and aerobics classes or out to Kamakura to visit friends.

Jake and his wife figured it was better to have the chauffeur do something rather than just hang around and wait. After all, the car and driver was his perk and Jake could decide what he should do.

I told him that I also had heard some complaining about his car, which had come to symbolize the inequality at the firm. Employees told me they didn’t think they should cut costs as long as Jake held on to this expensive perk. He disagreed. He kept the perk, and after a few months, gave up on the cutting expenses and started cutting employees. As you might expect, motivation plummeted and some of the best talent left.  Even Jake left a year later.

If Jake had just given up the car, taken the train or taxis like the rest of the employees, he would have had an easier time getting people to accept the changes. He also could have saved money on consultants and training programs designed to get employees to implement the cuts and work together.

Cutting Costs or leading change?  What action can you take that will make a difference and set an example? What can you change about yourself?


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