Extreme Downsizing – Burnout!
by Lois Melbourne
There are more than a few executives, customers and analysts standing around squealing, “What were they thinking,” now that some of the layoff impact is being felt downstream of the layoff activity. NPR covered a story regarding Extreme Downsizing and how it could take years to recover. The cuts were ‘supersized’ to include 20% of the workforce. The Buzz at CNN Money is showing that burnout is or can hit the people remaining at these companies, because production expectations were not reduced along with the staff that were cut.
We see good companies go into their layoffs with laser focus and critical decision making. It takes strategic thinking and only slightly more time at the critical assessment level than a slash and burn approach to layoffs, but it pays off for YEARS. We spend good time with our customers helping them to understand their employee base, their corporate structure, their successor bench strength and giving them the ability to manage it when the time for change occurs. We see what works and help to facilitate it again and again and again.
So what does a best practice reorganization with layoffs look like?
Critical roles are assessed and protected
Under performing products or services are reduced or eliminated, and the people responsible for them are reviewed and likely removed. If there are high potential and high performer employees in those areas, they are redeployed instead of cut from the company. If you make your savings because you canceled an entire product line and the costs associated with it, then you are not fueling the burnout of the remaining employees. They should not be expected to add another product to their work load, because you cut staff. (see link to the Buzz article above)
Good companies have been assessing successors or replacements for all or most key positions. Weigh up those successors against the incumbents. Which could do a better job? Which could be deployed and would work better somewhere else in the company?
A layoff is the best time to cut their under performers (this example fits in America, the EU and Work Councils in the EU have some different perspectives here – ugh, frankly I like the American system on this one, guys), so they whip out their ‘Dead Wood Be Gone’ eraser and use it.
Don’t just remove layers of management positions. You will strip your ability to develop your leaders and keep your communication lines flowing (unless you are ridiculously structured).
You are ridiculously restructured in having really straight branches in your org chart with managers being the sole report to another manager and so on…
Analyze the number of direct reports that report to a manager. Make sure the number within a given span of control does not get out of hand for the type of work being done. Review redundancy in tasks. Hint to us Americans: There is a reason that it is called ‘being made redundant’ instead of ‘laid off’ in England.
The last best practice for a layoff – when you don’t have to have the reduction in force to weather the economy anymore, HIRE MORE GOOD PEOPLE and recognize those that have carried you through the tough times! It is good for the economy. It is good for the customer. It is good for the employees that you have ‘saved’ and may be working to a frazzle.
Cheers,
Lois
