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:

Email Antics: 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.

Organizational Loss: Searching Behavior

When organizations suffer painful losses, their responses can sometimes be destructive, further harming the organization and its people. Here are some typical patterns of destructive responses to organizational loss.

Teamwork Myths: Formation

Much of the conventional wisdom about teams is in the form of over-generalized rules of thumb, or myths. In this first part of our survey of teamwork myths, we examine two myths about forming teams.

Twenty-Three Thoughts

Sometimes we get so focused on the immediate problem that we lose sight of the larger questions. Here are twenty-three thoughts to help you focus on what really counts.

A Review of Performance Reviews: The Checkoff

As practiced in most organizations, performance reviews, especially annual performance reviews, are toxic both to the organization and its people. A commonly used tool, the checkoff, is especially deceptive.

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

Forthcoming issues of Point Lookout

Coming October 17: Overt Belligerence in Meetings

Some meetings lose their way in vain attempts to mollify a belligerent participant who simply will not be mollified. Here's one scenario that fits this pattern. Available here and by RSS on October 17.

And on October 24: Conversation Irritants: I

Conversations at work can be frustrating even when everyone tries to be polite, clear, and unambiguous. But some people actually try to be nasty, unclear, and ambiguous. Here's Part I of a small collection of their techniques. Available here and by RSS on October 24.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenUrVynfXanMVHnuKvner@ChacjzcAMNvNjbumIVvVoCanyon.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, USD 11.95)
• Get 2003-4 in Why Dogs Wag (PDF, USD 11.95)
• Get 2005-6 in Loopy Things We Do (PDF, USD 11.95)
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, USD 11.95)
• Get 2009-10 in The Questions Not Asked (PDF, USD 11.95)
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, USD 28.99)

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 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 6:00 PM June 29 (Eastern Time), Monthly Webinar, Technobility Webinar Series. You can earn 1.0 Category 'A' PDU by viewing this program. View this program now.