How to do more with less.

• Position: Maintaining competitiveness with a reduced workforce - Treasury Management

Though many say the recession is over, one serious problem left behind for treasury departments is skeletal staffing. Two financial executives share their solutions for staying competitive with fewer people.

After the wave of restructuring, staff sizes will never be the same. How do you cope? Establish quality programs and analyze how you process your work, including benchmarking. It worked for these companies.

In the recession that was, most companies experienced some kind of restructuring, particularly staff downsizing. As recovery begins, however, one factor is obviously different from past recessions: job recovery. Structural change has resulted in jobs being lost permanently.

The following presentations are adapted from a panel discussion held recently at Financial Executives Institute's Treasurers Conference in New York. They capture the experiences of two companies that have gone through this downsizing cycle. Whether the program is called total quality management, continuous improvement, staff empowerment or organizational change, the complexities of operating in a reduced organization require new insights. Among the many issues companies are addressing, one stands out: How do you do more with less?

How, in other words, do you maintain sales and increase profitability? How do you survive the potential risk in downsizing? And how can analysis help you to get more out of employees?

THE ANSWER IS TOTAL QUALITY

Ronald P. Vargo Vice President and Treasurer TRW, Inc.

TRW is a technologically oriented international company with sales in 1991 of about $6 billion. We operate in three industry segments: automotive, space and defense, and information systems and services. Each segment has been affected by world changes and a relatively weak U.S. economy.

To improve our competitiveness and strengthen our overall financial position, we announced in 1991 a substantial restructuring program. TRW would divest non-core assets, streamline our business and downsize staff. In 1992, we sold about $400 million in assets and paid down a like amount of debt, more than 25 percent of our total. Employment declined by 7,000 people in 1992, due to divestitures and staff reduction programs. In our space and defense segment, about 40 percent of our business, we have reduced staff from about 30,000 people in the mid-1980s to fewer than 18,000 today.

During this time, however, our space and defense segment has maintained sales and increased profitability. How did it do this? How did it produce more with fewer people? One key was the institution of a total quality management (TQM) program. There was a conscious effort to correct errors, reduce cycle time, eliminate nonproductive work and change employee attitudes.

In the finance operation and the treasury operation, we, too, have embarked on a TQM program as we strive to add value to our financial services. One of our first steps was to frame our objectives in a mission statement. Our first objective said we would maintain the highest standards of professional integrity and ethical conduct. Our second objective said we would take an active role in the operations and strategic direction of our business, not just in treasury or finance matters. Our final objective said we would provide the highest quality services to meet the needs of our customers.

To further this effort, we've brought operations people into the treasury department and placed treasury people in operations areas. Our purpose is to build better bridges, to develop an understanding of each other's needs and abilities, as well as to develop people. Our focus in treasury is on the management of risk: foreign-exchange risks, interest-rate...