From the course: Cost Reduction Tips - How To Cut Costs And Maximize Profits

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Reorganisation: Good or bad?

Reorganisation: Good or bad?

From the course: Cost Reduction Tips - How To Cut Costs And Maximize Profits

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Reorganisation: Good or bad?

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- The final way to save costs on people is reorganizations, and I've separated this out and I've put it at the end because I don't agree with reorganizations, not usually. Occasionally, you need to reorganize a company. If your market has really changed and you have to change the outward facing part of the organization, then okay, fine. But reorganizations in order just to save people, I think they just never work. I've seen so many bad ones. All that happens is they result in uncertainty and fear and the good ones leave. I mentioned prices a little earlier on. The square root of people produce 50% of the ideas, so if you reorganize a company, you've got 100 people, you'll find 10 of those are your key people, and they will be the ones who leave because they just think, I don't need this. I can get a job anywhere, and they'll leave and you'll lose 50% of your ideas and your output. Reorganizations are really damaging, and those people will go and you'll really struggle to replace…

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