Is the environment used efficiently?
This is the third main sub-question to answer ‘Is the learn/work environment adding value?’ Adding value by using the learn/work environment in a smarter way can be achieved at different levels of ambition. Ranging from a purely technical and financial approach to a level where the learn/work environment is regarded as a strategic asset for the primary process. Focus on resilience and adaptability rather than on costs.
Through professional management of the learn/work environment, it can act as a leverage for improvements in the primary process and in secondary business processes that seriously affect the budget.
The learn/work environment is an enabler, not just a cost center. It has both revenues and costs that have a direct and indirect effect on the cost structure of an organization. From a cost focus to an outcome focus.
Focus on people and their behaviour
A prime focus on people and their Behaviour instead of mainly on processes, procedures and structures of the organization, the Bricks & Bytes. Only when employees share the dream of the organization does synergy arise and become they intrinsically motivated to increase productivity and add (more) value.
The Covid-19 pandemic has pushed us in economically exceptional times and have forced us into new situations for working. Stable environments can change in the blink of an eye. Creating organizations that move accordingly is vital to remain relevant.
By remaining transparent and involving your employees, you will see that confidence grows and, with it, the commitment to work together. These are also the moments when the bonds become stronger and the best new ideas emerge.
Therefore make relevant key numbers understandable to everyone to give your employees insight into the current financial situation. Without transparency, your employees will lack the fundamental understanding on which they can base their decisions upon.
“Money does nothing, people do everything.” (Michael Tellinger)
The effects of cost reduction have a limit, whereas the so-called soft outcomes of culture and process changes can be continuously reinforced and enhanced. “Growth and profit are a product of how people work together.” – Ricardo Semler.
Based on a DuPont analysis, the possible effects of interventions in the learn/work environment can be simulated using ‘what-if scenarios’ within the context of the own strategic organizational goals.
- RESOURCES: Who and What is Where required to do the work? Which capacity and competence are required for managing the required objectives and expectations?
- TIME: By when, and for how long, should the outcome be delivered?
- COST: How much money is available to achieve the outcome? Price is what you pay, value is what you get.
It is tempting to pay particular attention to the easily measurable direct cost reductions. Reducing occupancy costs is like slimming: as a temporary measure often fine, but it should never be an end in itself. Slimming can tip too far, which will be only noticeable after the turning point.
“A price is meaningless without an adequate measure of quality.” (Edwards Demin)
For a correct assessment of the amount of the occupancy costs, these must be compared with the performances provided. The cost level in itself says too little.