Home > Uncategorized > Restructuring or Downsizing with Dignity and Respect – Part One

Restructuring or Downsizing with Dignity and Respect – Part One

Have no doubt; restructuring or even downsizing can be extremely challenging for any organization. Sometimes it is absolutely necessary for many reasons. That said, when put to the test, it can press and will question all of management’s decisions and resources, including how well a business makes money as well as its profitability, but also the quality or state of the organization’s human capital let alone the mid to long term business strategy and goals.

Imaginably so many otherwise presumably first-rate executives who may have come in from “outside a very specialized and yet emerging market” may make the shortsighted decision to restructure or eliminate critical senior positions without consulting or even measuring the true needs of an infant yet burgeoning global organization.

They ignore all the signs pointing to a restructure or layoff until it’s too late to plan sufficiently; then action must be taken immediately to reduce the financial drain of excess staff. The tough decisions of who must be laid off, how much notice they will be given, the amount of severance pay, and how far the company will go to help the laid-off employee find another job within their field of expertise are given less than sufficient attention. In fact in some instances pre-existing confidentiality agreements may even prohibit an employee from even applying for similar positions within their own industry. These are critical decisions that have as much to do with the future of an organization as they do with the future of the laid-off employees, so they should be considered very carefully.

So what happens? These decisions are handed to the legal department, whose primary objective is to reduce the risk of litigation, not to protect the morale and intellectual capital of the organization. Consequently restructuring or downsizing is often executed with abrupt, ruthless efficiency that leaves laid-off employees angry and surviving employees feeling vulnerable, demoralized, and poorly prepared to start rebuilding the business.

Vulnerability is the enemy of high achievement. It produces a work environment of withdrawal, risk-averse decisions, severely impaired morale, and extreme blaming. All of these put a stranglehold on an organization that now desperately needs to excel. In this situation, downsizing becomes a contributor to an organization’s down-fall rather than a catalyst for growth and profitability.

These next few series of blog posts will be a little off beat from my usual articles, but I find them topic graphically relevant and will discuss recommendations for how to avoid the pitfalls of restructures and downsizing.

I look forward and encourage your thoughts and feedback.

Categories: Uncategorized
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