Progressive Downsizing Summary

Everyone faces the necessity of downsizing an organization in their career.  Most do it poorly, losing organizational respect, losing effectiveness, gaining irritability.  There are many ways to go about it; but the Cut and Fill method assures gaining effectiveness and organizational espirit de corps and reduced costs simultaneously.  Topics: Beat the Bloat; Voluntary Termination; Across the Board Destruction; Targeted Reductions; Cut and Fill; The CEO’s Guide to Progressive Downsizing. To be published 3Q07.

Comments

[John Kilcline]

Tom shared with me a bit more about this at a dinner a while back. I can't quote him, but this is what I learned:

Turning around a company can require firing a lot of people. However, this doesn't have to be beginning of the end for a company, it can be the opportunity to build the better company that has been hiding inside.

Both the decision making process and communication to employees of the restructuring should be focused on this view. While it is very hard for managers to choose whom to fire, managers are pretty good at picking the "dream team" of people from the organization who would be most effective. By rebuilding around these "dream teams", you can find both the structure and the people that belong in the new organization. This contrasts sharply with the effect of voluntary layoffs, which encourage the competent and marketable employees to leave, with a smaller, but weakened firm remaining.

After communicating this strikingly different method to employees, the results, in Tom's experience, are dramatically different. Whereas employees are usually depressed or anxious after layoffs, employees can recognize the effectiveness of teams made from the best employees and become re-energized about the likelihood of success for the company and the continuation of their employment without further layoffs.

When Tom first shared this strategy with me, I felt doubtful of it's likelihood of success, but his track record and honesty has left me certain. Now I just need to find a company in need of a turnaround.