Downsizing: The Process
“Downsizing” (the
polite way of saying “firing lots of staff”) is a traumatic time for everyone
involved from those who are being “let go” right through to IT support. Recently,
I wrote about the planning stage.
Managing the process is just as critical and is by no means the end of
the story, as you will see…
This is where the real pain starts as you “let people go” (another
polite way of saying “fire them”). To
all those who use this euphemism, the phrase “letting go” implies that they have
chosen to leave and that you are
doing them a favour. If they have
volunteered (e.g. for early retirement), “letting go” might be justified. For those singled out for compulsory
redundancy, then call it like it is.
How you manage the redundancies will influence how your
business operates in the future, the morale of those who remain with the
organisation, perceptions of stakeholders and the community at large.
I’m assuming that, after looking at all the options and consequences, you’ve reluctantly decided that
some people have to go…
To start with, colleagues will lose friends and co-workers
and will have to pick up the work left by their departure. Morale will plummet because of this. How will you handle it?
Make sure that all processes, limits of authority and
decision-making channels have been reviewed and re-documented, agreed and
re-assigned. You just might find during
this process that firing someone may result in a disaster that costs more in
terms of lost business, goodwill or processing ability (or all three).
Next, customers, suppliers, auditors, regulators, etc will
notice that their “favourite” staff or contact is no longer there, or that
service levels have dropped (hopefully not to critically low levels which may
drive them away). Will it impact their
willingness to continue to do business with you? You will need to explain why and what action
you’re taking to ensure that they continue to receive good service.
Internally, you might notice that the wrong person in IT has
been removed if suddenly the computers stop working. This will impact on your ability to continue
doing business.
Shareholders may love you for “cutting costs” by removing
“excess staff”, but you’ll be doing them no favours if this means that their
investment is no longer able to do business and therefore generate returns for
them. They won’t thank you if the value
of their investment falls…
There’s also the security angle; for example, how do you
prevent “revenge” attacks by IT staff who have been fired? If you are removing people in “sensitive”
roles or who have access to “sensitive” information, how do you prevent that
from leaving with them?
The most important part I have reserved for last: the staff
who are being fired. Some of them may be
expecting it; some may be dreading it.
The way you handle them is key. Don’t
forget: one day, they may be the person deciding whether your business becomes their
supplier. Equally, if word gets out that
you messed up, you may find you have a major community and PR crisis on your
hands.
Some organisations try to soften the blow with financial
incentives (e.g. large payoffs, paying for training courses, “outplacement consultants”,
etc). In some countries, there are
strict laws on firing people, which have to be observed. Only you can best judge how to manage the
situation. Whatever you do, don’t adopt a standard “one size fits
all” approach. Some people may actually
prefer a larger cash settlement than you paying for an expensive outplacement
consultant… Better, perhaps, to agree an
overall “value” of severance package which can be spent as the member of staff
wishes (taking local legal and tax considerations into account).
Finally, I remember one case of someone who had been made
“redundant” and who had come to their last day at work. Some two hours before they left, a technician
came to remove their desk phone. The
person’s manager told the technician to come back later. This small act of respect restored a measure
of dignity to the person about to leave.
Labels: Crisis Management, Customer Care, Leadership, Strategy
posted by William Martin @ 11:14
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