When organizations get smaller, the KPIs are headcount and lower labor/benefit costs. After the reduction occurs, most planned, scheduled or processes related to day to day activities continue on with fewer people with the “hope” that some steps in day to day activities are simplified to “match” the new lower capability of the smaller workforce.

But what about problems? Why is it important to consider problems in a downsizing mode? Let’s say that the workforce is reduced by 10%. My observation is that 90% of the people are left dealing with 100% of the problems that were occurring prior to the actual reduction in force. Going forward from that date, the problem load may actually increase because there are fewer people to analyze, investigate or solve problems and fewer people to prevent problems from occurring. Additional profit dollars associated with lower manpower costs are often offset by a higher problem load that is unmeasured.

In this environment, it is MORE IMPORTANT THAN EVER to take on recurring problems as a very important way to improve productivity and reduce costs.