Monday, 14 September 2015

Downsizing: The Aftermath

In previous articles, I wrote about planning and then the process of downsizing.   Now we need to examine what happens after people have been “let go”.

You will need to consider two dimensions: internal and external.  Over internal, you have a fair amount of control.  Over external, at most only a limited degree.

On the internal side, let’s start with morale.  The staff who survived will be suffering low morale for a number of reasons:
  • “Survivor’s Guilt” (the fact that they weren’t “let go”);
  • Loss of colleagues and friends;
  • Increased workload (not necessarily accompanied by an increase in pay);
  • Processes not necessarily amended to take account of the new reality.
For the first two above, you’ll need to help them understand why they survived and their future contribution to the new, smaller organisation.  They may still fear that more redundancies will come, so they need re-assurance that no more cuts are coming.  One tip: if you're going to cut staff, cut once and cut big.  Don't adopt a “salami-slicing” approach with cuts every six months/year.  This will simply mean that people will leave faster (if they can) out of fear that they’ll be next in line…

They’ll also be feeling for colleagues and friends who were “let go”.  They will know that those people had families, hopes, etc and will worry for them.  Understanding this helps in working out how to address these feelings and shows that you're “human”. 

It’s often a good idea to call people together and explain why things happened the way they did and why the organisation is now in a better position.  Try to get some “quick wins” chalked up so people start feeling better about themselves and the company’s future.

Processes often develop around the people who work them.  Productivity will suffer due to increased workloads as well as processes that haven’t been re-designed to take account of the new reality (particularly if they are seen as “critical”).  If, during the planning and process stage, you didn’t address this issue, now is the time to do so.

On the external side, you’ll have:
  • Customers and customer service
  • Suppliers/regulators
  • The Community at large

to think about. 

This is where you have less control.  With customers, suppliers and regulators you will (I hope) during the planning and process stages, have explained what you're doing and why as well as how it will impact them.

In the early stages of the newly-shrunk organisation, you’ll need to monitor customer and supplier care/service extra-carefully.   Make sure that any new processes bed down or are corrected quickly.  Engage your customers, suppliers and regulators to obtain feedback.

With the community at large, you have least control of all.  Without knowing the particular circumstances of any organisation, this is something that can only be judged at the time.  Again, this is where proper planning and process can make a real difference in how much potential “negative fallout:” you get.

In all, you need to understand that “downsizing” is a longer drawn-out process than you may have imagined.


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to offer solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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posted by William Martin @ 14:51

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