Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 2, Issue 29;   July 17, 2002: Double Your Downsizing Damage

Double Your Downsizing Damage

by

Some people believe that senior management is actually trying to hurt their company by downsizing. If they are they're doing a pretty bad job of it. Here's a handy checklist for evaluating the performance of your company's downsizers.

Lately, many companies are in deep financial doo-doo. Some have addressed this issue by downsizing. Basically, they fire a lot of people. Often this tactic is so harmful to the company that customers, shareholders, and employees wonder whether management is actually trying to hurt the company.

A 19th century shipwright's mast broad ax

A 19th century shipwright's mast broad axe. Photo courtesy U.S. Federal Highway Administration.

Is that really possible? To evaluate the performance of your company's Chief Downsizing Officer (CDO), use this handy checklist for executives who really want to ruin their companies in an effective manner.

Be sneaky
Don't let on that you're about to fire 20% of your employees. Giving people a heads up just lets them avoid major purchases and warn their families.
Maintain executive compensation
Don't reduce executive compensation at all. If possible, increase it. This builds resentment among employees, insecurity among customers, and fury among shareholders.
Don't downsize enough
Maintaining or increasing
executive compensation
during a time of cost
reduction and layoffs
is a great way to
build resentment
Make sure that you'll have to downsize again. Doing it twice in quick succession puts everyone on edge permanently.
Announce rolling layoffs
Tell everyone you plan monthly reductions for the foreseeable future, because rolling layoffs could reduce the total number of people affected, assuming conditions improve. But you know what will really happen — people will believe that every month is their last.
Schedule the announcement for December 24th
In Europe, Australia, and the Americas, the optimum time for downsizing announcements is just before Christmas. That way, people will already have spent more money than they would have if only they had known. No point hurting the economy too.
Don't solicit volunteers
Some people actually want to leave — they would prefer a layoff to quitting. Don't lay off people who want to leave, while you keep people who want to stay. You can do more damage if you lay off people who want to stay, while you keep people who want to leave.
Offer early retirement
Early retirement programs offer a relatively safe way to jettison your most valuable and experienced people first, without the legal risks of laying somebody off one week before they become eligible for retirement.
Don't close unprofitable operations
Keep them running. They'll probably lose even more money with only 80% of their staff. Instead, close or spin off any profitable operations, assuming you have any.
Don't cancel any initiatives
Internal initiatives, especially those with only long-term benefits, should remain at high priority. If you must cancel something, cancel anything that might immediately cut expenses or shorten the sales cycle.
Hint that there might be more
In media interviews, when asked if these cuts are the last, squirm. This signals the employees who have alternatives — who are, of course, the most difficult to replace — to get moving on job searches.

How well executed is your company's downsizing program? 1-3: ineffective; 4-7 not so good; 8-10: don't laugh — you might be next. Go to top Top  Next issue: Working Out on Your Dreadmill  Next Issue

52 Tips for Leaders of Project-Oriented OrganizationsAre your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!

Your comments are welcome

Would you like to see your comments posted here? rbrenxofjubInNniTLIZzner@ChachmzzkoxxfSudSytjoCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Personal, Team, and Organizational Effectiveness:

A doorknobDoorknob Disclosures and Bye-Bye Bombshells
A doorknob disclosure is an uncomfortable, painful, or embarrassing revelation offered at the end of a meeting or conversation, usually by someone who's about to exit. When we learn about bad news in this way, we can feel frustrated and trapped. How can we respond effectively?
A cup of coffeeShooting Ourselves in the Feet
When you give a demo to a small audience, there's a danger of overwhelming them in a behavior I call "swarming." Here are some tips for terrific demos to small audiences.
An anxious dogInner Babble
It goes by various names — self-talk, inner dialog, or internal conversation. Because it is so often disorganized and illogical, I like to call it inner babble. But whatever you call it, it's often misleading, distracting, and unhelpful. How can you recognize inner babble?
The wreckage of the Silver Bridge across the Ohio RiverHyper-Super-Overwork
The prevalence of overwork has increased with the depth of the global recession, in part because employers are demanding more, and in part because many must now work longer hours to make ends a little closer to meeting. Overwork is dangerous. Here are some suggestions for dealing with it.
Industrial robots assembling automobilesUnnecessary Boring Work: I
Work can be boring. Some of us must endure the occasional boring task, but for many, everything about work is boring. It doesn't have to be this way.

See also Personal, Team, and Organizational Effectiveness and Managing Your Boss for more related articles.

Forthcoming issues of Point Lookout

Artist's concept of possible colonies on future mars missionsComing June 28: Tackling Hard Problems: I
Hard problems need not be big problems. Even when they're small, they can halt progress on any project. Here's Part I of an approach to working on hard problems by breaking them down into smaller steps. Available here and by RSS on June 28.
Artist's depiction of a dust storm on Mars with lightningAnd on July 5: Tackling Hard Problems: II
In this Part II of our look at solving hard problems, we continue developing properties of the solution, and look at how we get from the beginning to the end. Available here and by RSS on July 5.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenSsvkCFfwLsEFMryHner@ChacIqOMkHPXKgIsOkWroCanyon.com or (617) 491-6289, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

Reprinting this article

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

The Power Affect: How We Express Our Personal Power
Many The Power Affect: How We Express Personal Powerpeople who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program. Here are some upcoming dates for this program:

Creating High Performance Virtual Teams
Many Creating High Performance Virtual Teamspeople experience virtual teams as awkward, slow, and sometimes frustrating. Even when most team members hail from the same nation or culture, and even when they all speak the same language, geographic dispersion or the presence of employees from multiple enterprises is often enough to exclude all possibility of high performance. The problem is that we lead, manage, and support virtual teams in ways that are too much like the way we lead, manage, and support co-located teams. In this program, Rick Brenner shows you how to change your approach to leading, managing, and supporting virtual teams to achieve high performance using Simons' Four Spans model of high performance. Read more about this program. Here's an upcoming date for this program:

The Race to the South Pole: Ten Lessons for Project Managers
On 14The Race to the Pole: Ten Lessons for Project Managers December 1911, four men led by Roald Amundsen reached the South Pole. Thirty-five days later, Robert F. Scott and four others followed. Amundsen had won the race to the pole. Amundsen's party returned to base on 26 January 1912. Scott's party perished. As historical drama, why this happened is interesting enough, but to organizational leaders, business analysts, project sponsors, and project managers, the story is fascinating. Lessons abound. Read more about this program. Here's an upcoming date for this program:

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Twitter, or share a tweet Follow me at Google+ or share a post Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
21st Century Business TravelAre your business trips long chains of stressful misadventures? Have you ever wondered if there's a better way to get from here to there relaxed and refreshed? First class travel is one alternative, but you can do almost as well (without the high costs) if you know the tricks of the masters of 21st-century e-enabled business travel…
52 Tips for Leaders of Project-Oriented OrganizationsAre your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around.
Reader Comments About My Newsletter
A sampling:
  • Your stuff is brilliant! Thank you!
  • You and Scott Adams both secretly work here, right?
  • I really enjoy my weekly newsletters. I appreciate the quick read.
  • A sort of Dr. Phil for Management!
  • …extremely accurate, inspiring and applicable to day-to-day … invaluable.
  • More
101 Tips for Managing ConflictFed up with tense, explosive meetings? Are you the target of a bully? Learn how to make peace with conflict.
Ebooks, booklets and tip books on project management, conflict, writing email, effective meetings and more.
Comprehensive collection of all e-books and e-bookletsSave a bundle and even more important save time! Order the Combo Package and download all ebooks and tips books at once.