Double Your Downsizing Damage

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.

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.  Top    Next Issue

Are 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

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:

How We Avoid Making Decisions

When an important item remains on our To-Do list for a long time, it's possible that we've found ways to avoid facing it. Some of the ways we do this are so clever that we may be unaware of them. Here's a collection of techniques we use to avoid engaging difficult problems.

Selling Uphill: Before and After

Whether you're a CEO appealing to your Board of Directors, your stockholders or regulators, or a project champion appealing to a senior manager, you have to "sell uphill" from time to time. Persuading decision-makers who have some kind of power over us is a challenging task. How can we prepare the way for success now and in the future?

Changing the Subject: I

Whether in small group discussions, large meetings, or chats between friends, changing the subject of the conversation can be constructive, mischievous, frustrating, creative, tension relieving, necessary, devious, or outright malicious. What techniques do we use to change the subject, and how can we cope with them?

Tactics for Asking for Volunteers: I

CEOs, board chairs, department heads and team leads of all kinds sometimes seek people to handle specific, time-limited tasks. Asking the group for volunteers works fine — usually. There are alternatives.

It's a Wonderful Day!

Most knowledge workers are problem solvers. We work towards goals. We anticipate problems as best we can, and when problems appear, we solve them. But our focus on anticipating problems can become a problem in itself — at work and in Life.

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

Forthcoming issues of Point Lookout

Coming April 14: What Micromanaging Is and Isn't

Micromanaging is a particularly dysfunctional pattern of management behavior, involving interference in the work others are supposedly doing. Confusion about what it is and what it isn't makes effective response difficult. Available here and by RSS on April 14.

And on April 21: Choice-Supportive Bias

Choice-supportive bias is a cognitive bias that causes us to evaluate our past choices as more fitting than they actually were. The erroneous judgments it produces can be especially costly to organizations interested in improving decision processes. Available here and by RSS on April 21.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenGBFYqdeDxZESDSsjner@ChacmtFQZGrwOdySPdSsoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

• Get 2001-2 in Geese Don't Land on Twigs (PDF, )
• Get 2003-4 in Why Dogs Wag (PDF, )
• Get 2005-6 in Loopy Things We Do (PDF, )
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
• Get 2009-10 in The Questions Not Asked (PDF, )
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )

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 500-1000 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 people 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.

• A recording of a program presented June 29, 2017, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
   
• A recording of a program presented June 29, 2017, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
   

Bullet Points: Mastery or Madness?

Decision-makers in modern organizations commonly demand briefings in the form of bullet points or a series of series of bullet points. But this form of presentation has limited value for complex decisions. We need something more. We actually need to think. Briefers who combine the bullet-point format with a variety of persuasion techniques can mislead decision-makers, guiding them into making poor decisions. Read more about this program.

• A recording of a program presented June 24, 2020, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
   
• A recording of a program presented June 24, 2020, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.