One of the least popular situations an owner/senior manager may have to deal with is downsizing. No matter how hard they may strive, there are sometimes events and forces outside their control that may force a company to downsize. This article will address two key components of dealing with this delicate situation: Credibility and Trust, and Strategic Steps.
Credibility and Trust
Openness. Management must develop the capacity to encourage and be receptive to input from employees. Employees must feel they can openly express opinions without fear of reprisal. Information must be shared openly throughout the organization.
Congruity. Employees must have confidence in the information received. All levels of management must deliver the same message. This implies that management at all levels understands and agrees with the message.
Autonomy. Owners/Senior management must trust their subordinates to use their judgment to implement changes and policies. This implies an effective team approach to planning and communicating.
Feedback. Owners/Senior management must be willing to make decisions with input from subordinates and must be able to stand by their decisions once made. To allow for this information flow, management must provide a forum and format, such as a place or places for the information to be exchanged and a guideline for how those transactions are to take place.
Shared values. There must be a common understanding of the organization’s vision, mission and goals. In turn, these must be operationalized so that everyone understands, commits to and achieves their departmental/unit goals.
Failure to accomplish the above can result in staff suspicion of management motives and actions; skepticism of management’s plans and programs; increased territoriality on the part of employees, departments or units; institutionalized resistance to any change, even if it is beneficial; development of "we/they” attitudes; and development of hidden agendas by middle management and employees.
Make Relevant Decisions
Who will make the decisions? Which personnel or departments?
A timetable must be established to determined in what order and in what time frame those decisions will be made and implemented.
Criteria must also be set. How will you select those to be released? Consider the following : seniority, merit, veteran preference and future needs.
Consider your options. You could do any of the following: eliminate part-time staff, reduce hours, offer short-term leaves or leaves of absence, transfer or reassignment, forced vacations and early retirement.
The rationale for downsizing? Develop a clear, logical statement of the situation, and tie this into the positive aspects of organizational survival and effectiveness.
Let people know what is going to occur and the reasons why. Also let them know how it will happen, when it will start, and when it will end. Then, lay out the options available to affected employees.
Follow your timetable. Provide follow-up, contact and feedback.
First, provide open access to management.
For those that have to be let go, offer out-placement and training services. Help employees learn how to locate other positions.
Be sure to reassure those employees who are not affected that the downsizing is over and that they will be at full employment. In the end, explain how the company’s public image will ultimately be strengthened and how the company’s prospects for survival and success are improved.
L. Douglas Mault is president of Executive Advisory Institute, Portland, Ore. The Web site is www.consulteai.com; he can be reached at (888) 428.3331.