Coping with downsizing

Downsizing is a very personal and emotional experience for all constituencies involved. Some managers hold the view that those that have survived a downsizing are supposed to feel relieved or even grateful that they have been able to retain their jobs. This, of course, might be true in some cases, especially where the employment cuts are few and felt to be justified. However, in large-scale staff cutbacks that result in a decimated organisation where long-term working relationships are severed and people are expected to take on new rules, something different is likely to occur – people go into a shock mode.

It seems odd, but those who survive downsizing suffer as much as those who don’t. Empirical evidence shows that the survivors experience an emotional shock that debilitates them and prevents them from suddenly changing direction and adjusting to the new system. To use more colourful language, ‘they freeze like a kangaroo in the headlights’. The familiar pattern is broken and the momentum that comes from routine and repetition takes time to recover. Not knowing what to do next, people will take a cautious wait-and-see approach. They are bound to seek leadership; someone to tell them what is occurring and what to do next. Apart from the loss of familiarity and momentum, a sense of personal loss occurs when people see their friends exiting or their positions abolished. In extreme cases, it may even feel like death in the family that requires compassion and time for mourning.

A good manager will have the understanding and sensitivity for the human need to cope with the shock and fear that people feel. This is combined with a sense of mission, direction and optimism that should help them through the painful transition from what once was, to what is to be.

Literature on downsizing refers to three distinct steps that need to be accomplished before the new organisation is back on track – endings, transitions and beginnings. During the ‘endings’ phase, people need to understand and come to accept that changes are real and irreversible. The old organisation, the old culture, and the old ways are gone and will not be restored. The old has ended, forever. It is reasonable and proper for employees to mourn for the loss, but, eventually, it’s necessary to move on.

During the ‘transitions’ phase, there is an in-between-time which involves letting go of the old and becoming familiar with the new. It’s frequently a time of uncertainty, confusion and stress. People may even feel a certain degree of incompetence until they have mastered the new roles. This time of wilderness necessitates strong managerial leadership.

During the ‘beginnings’ phase, people come to accept and master the new culture, the new structure and their new roles. A new routine and a new sense of normality begin to emerge. The old ways have faded into memory and the new ways become the ordinary. People feel competent and confident again. Productivity increases as people focus on their jobs rather than dwelling on personal anxieties.

After the downsizing

It’s important to recognise that downsizing will be met with an emotional response. People will feel victimised and will need to mourn their losses before they can move on. As a manager, you might be able to buy them time and provide professional counselling. In any given group, do expect that at least 60 to 70 per cent will be indifferent or take a wait-and-see attitude. Another 10 to 15 per cent will be openly hostile or will subtly sabotage the changes and try to return to the old ways. The remaining 10 to 15 per cent will proactively try to help you make things work. They are your leaders.

As a manager, try to exhibit optimism and a can do attitude regarding the required changes. Promote positive thinking and speaking as much as possible. Don’t deny the trauma and the pain that is occurring. Rather, find and emphasise the bright spots. Don’t dwell upon the losses, the difficulty of making the transitions, or all the piled up work that ought to be done. Try to eliminate criticism and fault finding altogether. Celebrate every success, no matter how minor it may seem.

It’s vital to develop a vision of the future that draws people towards doing the right things. Details can be developed as you go along. People will need a clear and understandable picture of the goal in their minds. It’s also important that they see something in it for themselves. Build teamwork and create a sense that ‘we are all in this together and need each other to make it happen’. Acknowledge that everyone’s contribution is essential and their input is greatly valued. Encourage group discussions where people can freely express their feelings and offer suggestions.

All managers should be trained in the human aspects of change. Managers have a tendency to be 80 per cent technically oriented and 20 per cent people-oriented. During change, those numbers should be reversed until the routine is re-established. Be honest about the realities and future expectations. Don’t say ‘the cuts are over’ if there’s no certainty that the business situation has stabilised or improved. It’s common for a series of changes to occur during the process of readjustment.

Empathetic leadership is far more powerful and effective than being a threatening autocratic leader. Don’t focus on efficiency and errors. Rather, expend energies on coaching and encouraging people to be successful in bridging the gap between the old and the new. Reward success and single out people that have adjusted quickly.

Finally, it’s worth remembering that in today’s dynamic and turbulent business environment, change is the norm, not the exception. In most industries, major organisational change, such as downsizing, is here to stay.

Dr Franco Gandolfi is associate professor of International Business, Cedarville University, Ohio, USA. Email: [email protected]