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Are the Economics Viable? December 23, 2011

Posted by stewsutton in Communications, Economics, Education.
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There are enormous changes taking place in many businesses and across multiple markets.  One need only look at a newspaper article or magazine or web-based media to see this rapid change.  However within the rush to become more cost effective in how we execute our business, we should also carefully consider the implications of making reductions – sometimes significant reductions in areas that appear to be non-essential.  Even that phrase non-essential has a rather strange ring don’t you think?  It sort of implies that when we are doing good, we can waste resources in areas that are non-essential and its only when things get tight, we must be realistic in our allocation of resources.

At some level its as if we need to go on a resources diet based on a season or two of overindulgence.  This is a cycle that seems to repeat across all industries and throughout history.  We never seem to learn from our past – even with its record being so clear.  A couple of examples come to mind that will illustrate the poorly planned cutting taking shape within two distinctly different industries.

The first example is within the banking industry.  One of the nations leading banks is making some dramatic adjustments to its allocation of internal resources (in the form of staff reductions) where the role and function of this staff is directed squarely at the quality of the banks communications.  That is to say, in the spirit of increasing the potential for more profit, the bank is going to reduce the clarity of its customer communications.  Now this is the sort of stuff that typically does not make headlines and it certainly would not be a candidate for communications to the customers of the bank – ironically because those individuals will no longer be there to write this correspondence.  Some would argue that smart people in the bank’s workforce will just add corporate communications to their list of existing tasks, but when was the last time you considered that your bank’s correspondence was not long enough – too short a narrative to really matter.  The well known objective of writing the short letter requires work – no matter what the profession.  So the customers of this bank can soon expect to see some longer letters, or if the letter is short, it may lack some clarity in its intended purpose.

Another example of misplaced economic choices is within the collective set of campuses that comprise the University of California system.  Once considered an incredible value, now each dollar spent on a UC education is increasingly consumed by layers of administration that seek to assure that the delivery of education meets all of the criteria set by another group of administrators.  Gone are the days when the educational dollar paid for faculty, facilities, and supplies.  We now live at a time when the layer upon layer of politically correct bureaucracy takes priority to that service for which the bureaucracy is subordinate.  Its not the quality of what we teach and the value of that instruction in relationship to a persons skills and value to an employer upon graduation – but rather the more important priority is that we have internal reviewers, compliance administrators, and a significant percentage of the university budget directed toward being compliant to a way of delivering education.  This overhead raises educational expenses and take the attention away from learning.  So students get less value and it costs them more. Where is the sound economics in that prioritization?  And could sound economics even be possible within an educational institution where the administrative component setting the priorities would need to diminish itself to achieve a more effective solution.

Other businesses are going through similar difficulties.  Many organizations will make strange choices when confronted with reducing budgets and increasing operational costs.  Will R&D be sacrificed because its benefits are not immediate?  Will processes be restructured in a way that diminishes a connection between the provider and the customer of the product or service?  Will we rely too heavily on technologies like social media to establish and maintain a connection where other options should be given priority?  Keep your eyes on the choices taking shape in your workplace and speak up if things seem to be drifting away from basic common sense.  Everybody has potential to offer perspective on the more viable solution that follows sound economics.

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Comments»

1. cna training and certification - March 24, 2013

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stewsutton - March 24, 2013

Thanks for the affirmation. Actually I have made no attempt to get listed anywhere and I was not aware that I was listed in Yahoo News. Maybe they are picking up keywords or topics or titles. Not sure. Analytics seems to be the quickly changing closely guarded secrets that a few keep to themselves.

2. Training For Cna - May 6, 2013

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stewsutton - May 12, 2013

Thanks for the feedback. Not much I can do but change the theme. It’s a pretty “plain” wordpress format and I tend to place more effort into the words than in how the site lays out the content.


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