Tough trading conditions drive management into re-evaluating activities and processes, forcing a rewrite of plans to more accurately reflect current status of an enterprise. Owners, the board, C-Suite, leaders and managers should constantly update planning to reflect changes in the marketplace and internal shifts that affect business productivity.
Streamlining, consolidating and downsizing ought to ensure more efficient service for customers and protect the company’s profitability and positive cash flows. In tough times, it is vital for leaders to address transformation, change and re-evaluation of plans, with the aim of positioning the company to compete more effectively in the future.
During downturns, leading to poor enterprise performance, management should speedily make organizational changes to structure, transform activities and review the possibility of downsizing the workforce as part of a survival process, becoming more effective, improving efficiencies and protecting the bottom line.
Downsizing certainly affects the work processes of an organization since the end result of the downsizing means there will be fewer people performing a similar workload. When forced to let employees go who have had several years with the company, the enterprise loses people with intimate experience of past decisions and how those decisions affected company productivity and profitability. The company misses out on the collective experience of these valuable individuals.
Knowledge management and learning organization techniques, in-place prior to downsizing, will help hold on to valuable information, which would otherwise walk out of the door when employees leave the company.
The act of downsizing results in two categories of people: those who involuntarily lose their jobs due to organizational downsizing, and those employees who remain with the enterprise after organizational downsizing takes place. Too often, downsizing is used as a euphemism for indiscriminately firing employees. Downsizing should be looked at as a business decision and not personal, but this is difficult to communicate to both those who are being told their services are no longer required and those who are to remain with the enterprise.
Downsizing a business is a difficult task and rife with dangers and there are major stumbling blocks which need to be avoided. Management needs to consider advantages and disadvantages to downsizing before making any final decisions. There needs to be a focus on the impact of this difficult process given the demand to protect motivation of those remaining with the enterprise. Managers need to make business decisions which are best for the company and try to leave out personal feelings when letting employees go.
Owners, the board, C-Suite, leaders and managers need to invest even more energy in the employees who remain after downsizing. These employees will aid recovery; fuel productivity, and will need to have trust and their morale boosted, despite the losses they have witnessed.
Managers need help to effectively address the needs of the people who remain with the enterprise. Practicing effective transformation and change-management following streamlining, consolidating and downsizing processes will ensure employees can move on, and will be committed to be part of the new effective operation of the enterprise.
Management must communicate openly and honestly with their employees regarding the reason for changes to future work processes as well as communicate any downsizing plans. Managers need to listen to employees and provide comfort when necessary to keep morale high among those employees still with the enterprise after downsizing. Managers who have been coached to coach at this stage are a major benefit for any company which is downsizing and letting people go.
Management will also need to take steps to prepare the workforce in advance of any downsizing. By treating those who are leaving with respect, and also treating those who remain with the enterprise fairly and compassionately, employees are more likely to be much more motivated and loyal.
Many otherwise first-rate leaders and managers badly handle streamlining, consolidation and downsizing, often damaging future operations. Extremely complex and difficult decisions are given less than adequate attention; decisions such as who must be made redundant, how much notice will be given, the amount of severance pay, how far the company will go to help laid-off employees find another job and how the enterprise will operate following these changes. These are critical decisions that have everything to do with the future of the organization.
Management’s resources and capabilities are challenged by streamlining, consolidating and downsizing. Weaknesses are exposed in core cultural issues such as: lack of trust; no objective evaluation of employees; poor knowledge management; lack of effective coaching to coach; dysfunctional communication; lack of training; low levels of alignment within and between departments; less than effective strategic execution; and poor ethical values.
Deploy your best motivational skills to handle those affected through tough times; be respectful to those who have to leave and ensure those who remain at the company are committed to future-successes and the enterprise’s new vision.