Spending Is More Closely Followed Than Before
Looking ahead to a world altered by COVID, investing in the right things is what will allow companies to begin recouping their losses from being closed, reallocate funds to get back to being fully operational, or invest in new ways to reinvent their business.
However, smart investing is easier said than done. As a leader, you are more concerned than ever about how your company spends its money. You realize that every dollar you spend should yield a return on investment (ROI). And you know that without an ROI your spending could have repercussions beyond decreasing the company’s profit and loss statements.
Employees that were furloughed, or now have to take on added responsibilities, may keep a more watchful eye on how their company spends money. They will wonder if the sacrifices they had to make to save the business money is being used correctly or being wasted. If it’s the latter, it can have negative effects on their morale, demotivate them, or worse yet, cause them to quit.
As a leader, you’re in a precarious position, in which you can have an impact on how your company spends its resources, but the decisions are not entirely up to you. However, to ensure your company not only survives but thrives in this ‘new normal’ business world, you have to ensure your company is investing wisely in the ‘right’ things.
Spend Less. Invest More.
These are not the same.
In the short term, businesses should find ways to reduce expenses. In the long term, leaders prepare for new opportunities by making the right investments in their business.
To position their organization to rebound quickly, leaders need to work collaboratively to invest wisely.
Here are three ways to cut costs and invest wisely:
1. Find New Ways To Cut Old Expenses
- Track expenses. It’s old school, but it’s hard to know if you’re not using your money wisely if you don’t even know what your money is being spent on.
- Use Environmental, Social, and Governance (ESG) criteria to evaluate potential savings in energy use, waste, pollution, and natural resource conservation. It not only can help you cut costs but also provide actions that show the company is taking its global citizen responsibilities seriously.
- As more employees work remotely, look for areas where expenses can be cut due to lower demand or usage, like office space, parking, and commuter costs.
- Review your software licenses and subscription costs to see what could be reduced or eliminated.
2. Invest In Skills Development (a.k.a. ‘upskilling’)
- You may have underutilized employees. Invest in skills assessments to find hidden potential among your team.
- Fill skills gaps. Are there new or additional skills your employees need to meet the expectations of your customers or clients?
- With more remote working, could your team use team-building training to work efficiently while working apart?
3. Track And Optimize Your Employees’ Productivity.
- Are your teams productive or are their days filled with tasks that don’t add value and match their skill level?
- Allow team members with advanced skills to delegate routine work so that you can maximize their productivity.
- Re-evaluate outsourcing. Scale back on outsourcing projects that employees can perform and invest in outsourcing that frees up your team to focus on more mission-critical work.
- Cut ties with unproductive employees – If you’ve provided an employee with the necessary tools, resources, and training to succeed, yet they still aren’t producing, it may be time to let them go.
- Expand your pool of workers especially if you’ve seen how remote talent can work for your organization.
The Bottom Line
Cash flow and cash reserves have always been an important part of business best practices. Now more than ever, your attention needs to be focused on ROI.
I help leaders and organizations think differently so that they can be more confident in their spending, make better use of resources, and experience higher returns on their investments.
Let’s discuss how I can work with you and your organization to make sound investment decisions so that company resources are wisely spent.
Let’s turn conversations into outcomes.
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