My good friend and colleague David Noer wrote a breakthrough book on the subject about 25 years ago. I guess not much has changed since then, or has it? His book was inspired by a series of layoffs and redundancies resulting from the many consolidations taking place during the 1980's. It has now become a modus operandi for organizations to periodically reduce their workforce in the face of falling margins and greater shareholder pressure.
Like the wise farmer teaches us, there is a time for everything. There is a time for planting, a time for irrigating, a time for harvesting, and a time for pruning. Pruning at the proper time ensures that the tree grows healthier and gives more fruit in later years. Pruning is not a substitute for sound management. It is a tool for improved performance.
Staff reductions, unless properly done, change the organizational landscape in undesirable ways. Zealous managers can be careless or indeed unscrupulous. People join companies because they are attracted by an employer's reputation, culture, and leadership. There is an implied psychological contract that emerges between the two parties -- the individual and the employer -- and sealed upon joining. Staff reductions often violate or outright break this "contract". The result is the tears that Noer writes about. Lives are disrupted, careers altered, promises broken, trust disappears. The company is not the same again. The romance is over.
Those who remain in the company are forever changed. Their trust is reduced. Their level of engagement becomes more perfunctory. Their view of the leadership becomes more skeptical and critical. Leaders need to heal these wounds as quickly as possible in order to avoid the hardening of the "categories" e.g., lack of trust, cynicism, stress, etc. It requires action, not commiseration.
Good leadership is not a litany of slogans, proclaimed when things are going well. Good leadership is demonstrated under painful conditions. Mediocre leaders will not be up to the challenge because they will be preoccupied with their own survival or are trying to show how good they are at cutting heads.
P.S.: This subject reminds me of the famous article "The Emperor Has No Clothes" -- a subject too important to discuss in this short blog. I suggest we all re-read it.
Let's ponder the question that Noer treated so well in his book.
How do we heal the wounds following a reduction in staff? How do we renew the organization?
In my view, restructuring or downsizing are not strategies for growth but admissions of poor leadership (doing the right things)and inept management (doing the right things correctly). Let's learn from our mistakes.
