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? rbrenkRmVjFxGdkXrPQVoner@ChacockmCEfzyPMIPkaXoCanyon.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:

The three large pyramids at Giza, from left to right: Menkaure, Khafre, Khufu.Email Antics: Part II
Nearly everyone complains that email is a time waster. Yet much of the problem results from our own actions. Here's Part II of a little catalog of things we do that help waste our time.
An elephantTeam-Building Travails
Team-building is one of the most common forms of team "training." If only it were the most effective, we'd be in a lot better shape than we are. How can we get more out of the effort we spend building teams?
A view of the site known as the Rock Garden, on MarsHow to Ruin Meetings
Much has been written about how to conduct meetings effectively. Here are some reliable techniques for doing something else altogether.
Lake Chaubunagungamaug signDeciding to Change: Trusting
When organizations change by choice, people who are included in the decision process understand the issues. Whether they agree with the decision or not, they participate in the decision in some way. But not everyone is included in the process. What about those who are excluded?
A Great Grey OwlHow to Waste Time in Virtual Meetings
Nearly everyone hates meetings, and virtual meetings are at the top of most people's lists. Here's a catalog of some of the worst practices.

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

Forthcoming issues of Point Lookout

Balancing talk time and the value of the contributionComing March 29: Virtual Blowhards
Controlling meeting blowhards is difficult enough in face-to-face meetings, but virtual meetings present next-level problems, because techniques that work face-to-face are unavailable. Here are eight tactics for controlling virtual blowhards. Available here and by RSS on March 29.
kudzu enveloping a Mississippi landscapeAnd on April 5: Listening to Ramblers
Ramblers are people who can't get to the point. They ramble, they get lost in detail, and listeners can't follow their logic, if there is any. How can you deal with ramblers while maintaining civility and decorum? Available here and by RSS on April 5.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenczuMvraDhPgeRmugner@ChacoWTYmpaOtfxXSddloCanyon.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

Changing How We Change: The Essence of Agility
MasteChanging How We Change: The Essence of Agilityry of the ability to adapt to unpredictable and changing circumstances is one way of understanding the success of Agile methodologies for product development. Applying the principles of Change Mastery, we can provide the analogous benefits in a larger arena. By exploring strategies and tactics for enhancing both the resilience and adaptability of projects and portfolios, we show why agile methodologies are so powerful, and how to extend them beyond product development to efforts of all kinds. Read more about this program. Here are some upcoming dates for this program:

Conflict Resolution Skills for Leaders
ConflConflict Resolution Skills for Leadersict is inherent in collaborative work. When conflict is constructive, it produces better outcomes. When it's destructive, it can be an insurmountable obstacle to success. In this program, we explore the connections between the outcomes of collaboration and conflict in both of its forms. And we emphasize the skills needed most by leaders. The leader's task is to manage conflict so as to ensure that the group achieves its objective with its capacity to collaborate intact, or even enhanced. Rick Brenner shows team leaders and team sponsors the techniques they need to manage team conflict for relationship safety and better outcomes. Read more about this program. Here's an upcoming date for this program:

Influencing Outcomes Without Authority
Your Influencing Outcomes Without Authorityability to influence others — whether upward, downward, laterally, or within a team — always depends on both the quality of your relationships with the people you influence, and on your perception and their perception of your personal power. In this program, Rick Brenner shows you the techniques for making things happen not by using formal organizational power, but by using informal, personal power. Read more about this program. Here's an upcoming date for this program:

Strategies for Leading Teams in Hard Times
When Strategies for Leading Teams in Hard Timesa project team is on task, the contributions of leaders are important, and little noticed. Sometimes the team encounters unexpected difficulty, or requirements change, or budgets are reduced, or any of a number of other things might happen. In these cases, the leader must make or facilitate decisions about how to respond or how to revise the plan. We get through it somehow. Hard times are something else altogether. Despondency, disillusionment, resource shortages, unexpected and severe failure of the plan, and toxic conflict can erode morale. How can leaders deal with such situations? Read more about this program. Here's an upcoming date for this program:

Strategies for Technical Debt: A Workshop for Enterprise Leaders
TechnTechnical Debt Management for Enterprise Leadersical debt is more than mere IT jargon. It's a metaphor that refers to the accumulation of technical artifacts that really ought to be retired, replaced, rewritten, re-implemented, or, if absent, created. We can find technical debt in almost any system, including those that seem to be working well. So what's the problem? The problem is the "interest charges." Systems carrying technical debt are more difficult to maintain, more difficult to extend or enhance, and more difficult to use, than they would be if we "retired" the debt. This engaging and eye-opening program points the way to a path that leads your organization out of technical debt, to make it more adaptable, more transformable, and more agile. Read more about this program. Here's an upcoming date 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.