How to Downsize With Compassion

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We are in a crisis. A new normal. Businesses from all sectors, of all sizes, all over the world are facing more uncertainty and complexity than ever before. Everyone is stressed. Managers and employees are facing tremendous pressure to produce more with less. Each year the “More” become “More” and “Less” becomes “Lesser.”  This new normal requires managers to execute stern decisive actions.

The risks are significant.

Typically layoffs are more the result of management and leadership ineptness than market conditions. Prior to layoffs company emphasized trust and employee engagement. Only to present the dictum, “Business is business.” The tendency of those with management responsibility is to personally assess the situation, come up with a plan of action, and then announce and implement it. If that means downsizing or layoffs, so be it.

There are legitimate cases where layoffs are needed. However such decisions are made absent of ideas from your “Most valuable assets.” I find that such “solutions” developed independently, in isolation, and at the top, often create more problems that they solve – for one basic reason. They fail to involve people in the problem, and therefore, fail to get their best thinking and commitment.

Here is my thinking after assisting companies in their turnaround over the years. I firmly believe your employees from top to bottom should be involved in the process. Involving people in tough decisions is the real measure of leadership. This trust factor is a business imperative where engaged people is a competitive advantage.

What does an organization gain from this? This is no soft, touchy-feely, approach where organizations are the only winner. The real measure of a progressive organization will be to use true win-win approaches in a layoff.

Laying off employees is part of a trust culture. Current employees will judge future performance on how well their peers are treated. Over the years I have seen managers who rudely laid off employees only to find themselves in the same position later dismayed with how they had become expendable. “The most delicate challenge is letting someone know that he or she has been let go. Don’t delegate this painful mission to the HR department. Most people are loyal first to their manager, then to their company. The person’s manager should deliver the message.” (HBR)

team building

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Here’s some advice from Chris Cancialosi in Forbes:

  1. Start immediately. Companies often keep their business strategies too close to the vest.
  2. Be transparent. Leaders are either preoccupied with gaining support for the new direction or they’re protecting a market position so competitors can’t “get the jump” on them.There’s no reason to keep shifting business priorities on your leadership team. Your officers and employees need to know what’s coming. A good corporate communications team will advise the right strategy (e.g., whom to tell, timing, tactics, etc.). Too often, corporate communications is forced to broadcast with little involvement or lead time and left to mop up the mess afterward.
  3. Never let bad news come as a surprise. Let senior-level executives know when your profits are down. Tell your employees when they need to step up their game and — more importantly — give them a chance to improve.
  4. Remember, not all messages are created equal. Prioritize them based on their different objectives.
  5. Understand that big changes are a two-sided coin. You have to rally the troops around the new vision or direction, but you also have to respect the fact that big company changes often result in confusion and personal change for employees. Clear, concise communication is far kinder than anything designed to “soften the blow.”As a former editor once told me, “Never bury the lede” (i.e., the first sentence of a news article that communicates the news quickly and entices the reader to continue reading). The best approach is to have an open, well-designed communication strategy ready to go.
  6. Try town hall-style conversations to talk about the process of making the decision, videotaped messages from leadership explaining the marketplace context and why the company is shifting priorities, or sending a well-briefed leadership team to find pockets of resistance and engage cynics in honest conversations.While a leader may have had weeks (or even months) to adjust to the new direction, his team hasn’t. Being as open and transparent as possible will help reduce the adjustment time. Read full article Forbes

The imperative for business today is to get authentic and real with people to have open conversations, to look at the problems and honestly share the issues at hand—and then listen to people and let their ideas flow.

When mutual understanding and respect is present, the spirit of trust inevitably starts to develop. This is how top organizations innovate in the new normal. Jim


Jim is president of InnoThink Group and Leadership Matters.  He is a leader in workplace learning, productivity, performance, and leadership training solutions. For over 25 years, we have helped companies improve their performance, productivity, and bottom-line results.

Contact us See a partial list of Jim’s clients. Click here to Hire Jim Woods to Speak  | Follow us: Facebook | Follow us: Twitter | Skype ID – jim.woods79


Jim Woods is president of The Jim Woods Group. A management consulting firm. Go here to see his work He advises and speaks to organizations large and small on how to increase top line growth in times of uncertainty and complexity. Some of his speaking and consulting clients include: U.S. Army, MITRE Corporation, Pitney Bowes, Whirlpool, and 3M. See more at his website

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Posted in Competitive Advantage, Employee Engagement

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