Revenue Risk: Freezing Off the Fat – A Human-Centered Approach

In today’s challenging economic landscape, organizations frequently need to reduce costs and eliminate unnecessary expenses. The term “freezing off the fat,” specifically coined by People Risk Consulting, offers an approach that’s intentionally gentler than traditional cost-cutting methods. Let’s explore how to implement this nuanced approach through a human-centered lens that balances financial objectives with employee wellbeing and organizational health.

“Freezing Off the Fat”: A People Risk Consulting Philosophy

Unlike harsh terms like “slashing costs” or “cutting to the bone,” People Risk Consulting’s “freezing off the fat” methodology draws inspiration from cryolipolysis—a medical procedure that gradually freezes and eliminates fat cells without damaging surrounding tissues. This deliberate terminology reflects the consultancy’s commitment to:

• Gradual change: Like the medical procedure, organizational cost reduction happens systematically over time rather than through sudden, traumatic cuts
• Precision targeting: Identifying and eliminating only truly non-essential expenses while preserving vital operations
• Minimal disruption: Reducing negative impacts on organizational health and employee wellbeing during the process

The Gentler Approach to Cost Reduction

Traditional cost-cutting methods often involve:

• Across-the-board cuts
• Sudden layoffs
• Abrupt elimination of programs

In contrast, People Risk Consulting’s “freezing” approach offers:

• Targeted identification: Using data analytics to precisely identify expenditures that don’t contribute to value
• Careful isolation: Separating essential from non-essential spending without disrupting interconnected systems
• Gradual elimination: Phasing out unnecessary costs through attrition, reassignment, and natural business cycles
• Preservation of surrounding “tissue”: Ensuring core functions and human capital remain healthy throughout the process

Understanding “Freezing Off the Fat” Through Human-Centered Design

Cost reduction isn’t merely a financial exercise—it’s a human one. When we view this process through the principles of human-centered design, we recognize that every decision impacts real people:

• Employees whose livelihoods and sense of security may be affected
• Customers who might experience changes in service quality or product value
• Stakeholders whose investments and trust in the organization may be tested

The Empathy-First Approach to Cost Reduction

Before making cuts, organizations should:

1. Engage in empathetic observation: Understand how resources are actually being used day-to-day, not just how they appear on spreadsheets
2. Conduct stakeholder interviews: Talk directly with employees, customers, and partners about where they see waste and what they value most
3. Map the human impact: For each potential cut, assess how it might affect employee morale, customer experience, and organizational culture

Identifying Waste While Preserving Value

People Risk Consulting’s human-centered cost reduction focuses on eliminating what doesn’t contribute to human value:

• Review expenses collaboratively: Include representatives from different levels and departments in cost reviews to gain diverse perspectives
• Process analysis with users in mind: When examining workflows, consider both efficiency and the human experience of those processes
• Value-based benchmarking: Look beyond industry cost standards to also benchmark employee satisfaction and customer experience metrics

Implementing Cost-Cutting Measures Responsibly

When it’s time to make changes:

• Transparent communication: Share the reasoning behind decisions, acknowledging their impact on people’s lives and work
• Phased implementation: Introduce changes gradually when possible, allowing people time to adapt
• Preserve psychological safety: Ensure remaining team members don’t feel overloaded or insecure after cuts

Mitigating Human Risk During Cost Reduction

Cost-cutting carries significant human risks that must be managed:

• Burnout risk: When teams are downsized, remaining employees often shoulder heavier workloads
• Knowledge loss: Critical institutional knowledge can disappear when experienced team members leave
• Trust erosion: Poorly executed cost-cutting can damage trust between leadership and employees
• Innovation decline: Excessive cuts to resources can stifle creativity and willingness to take risks

Human-Centered Cost Reduction Examples from People Risk Consulting

• Remote work options that reduce office space needs while offering employees flexibility and work-life balance
• Cross-training programs that build versatility while reducing dependency on specialized roles
• Collaborative budget exercises where teams identify their own most valuable resources and potential cuts
• Investment in preventative wellbeing to reduce long-term healthcare costs while supporting employee health

Monitoring Both Financial and Human Outcomes

Successful cost reduction requires tracking:

• Traditional financial metrics: Expense ratios, profit margins, operational costs
• Human-centered metrics: Employee engagement, retention rates, customer satisfaction

By adopting People Risk Consulting’s “freezing off the fat” methodology, organizations can address financial challenges without resorting to the organizational trauma often associated with traditional cost-cutting approaches. This gentler, more strategic method preserves the people and relationships that drive sustainable success while still achieving necessary financial outcomes.

Do you need to reduce costs with minimal human disruption in your organization? We can work with firm or in-house personnel to save you money and raise value consciousness in your organization. Connect with us for a complimentary inquiry.