Considerations for Implementing a Major Layoff

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Jan 31, 2007 - OI Partners

EVENT MANAGEMENT: Major layoffs present any organization with the enormous challenge of managing a complex, companywide event. The impact of larger layoffs can be significant, affecting the ongoing health of the business, future success, workforce morale and bottom-line productivity. How do "best-in-class" companies manage these events? Our experience with downsizings, involving many hundreds of people, has shown that there are a number of critical elements that can provide a failsafe for ensuring the success of a major Reduction In Force (RIF). These elements include:

Executive Leadership Client organizations that successfully navigated a major RIF had involved and invested leadership at the CEO and vice president levels from the planning stages through to termination day, post-termination communication, and key staff accessibility. Executive team participation was essential in testing the connections between the corporate business strategy, workforce reduction policies and precedents and the tactical execution of the RIF.

Strategic Project Management The value of a project manager who is strategic, collaborative and diplomatic surfaced time and time again as a key to success. Effective project managers provide focus, engage leaders at multiple levels and maintain flexibility. Humor is also cited as an important ingredient to their success. Without a doubt, this role proved to be the most significant assignment of all.

Planning and Preparation Without fail, the key to our client's success was superior planning preparation. Major RIFs require a level of consistency in timing, message and separation activity that can only be achieved by anticipating and rehearsing all the details of the event. From information packets, to press releases, to turning in cell phones and keys, preparation facilitated the acceptance of this event for departing employees, remaining staff and customers.

Contingency Plans The most prepared client organizations also planned for the unexpected. Adverse impact terminations, customer reactions and community response and diverse "damage control" and safety concerns become issues. Contingency plans included on-call security staff, alternative exits for distraught employees, personal follow-up for sick or absent staff and available managers and leaders to address escalating concerns. Time spent asking the "what if" questions and role-playing the "worst-case" scenarios neutralized the inevitable chaos of these events.

There is no way to diminish the significance of a major RIF in the life of an organization. Investing in the critical elements of planning and execution can, however, go a long way to ensuring the event becomes a platform moment for the ongoing success of the organization.

STAFF CONSOLIDATION: One of the most difficult leadership tasks in managing a major layoff is deciding who will go and who will stay. Much of the decision-making is guided by front-end considerations, such as adverse impact, legal liability and a general sense of fairness. Once those screens have been applied, decision-making moves to a more strategic level of how to retain the talent required for ongoing success. Core skills are clearly needed and usually readily identified. But what other considerations should you weigh in the "strategic decision making phase?"

From our experience in managing large layoffs, the following strengths become critical in galvanizing the remaining workforce and advancing the organization:

An Enterprise Mindset Post layoff environments often require a can-do mentality and out-of-the-box mindset. Staff who tend to see challenges as opportunities and obstacles as challenges are critical to creating positive energy and momentum during this time of change and consolidation. These individuals usually understand the business realities driving change and the stretch goals and benchmarks required for ongoing success.

A Collaborative Style It is human nature to perceive change as loss. Those who witness the exodus of valued coworkers feel the loss of support and relationships in the midst of feeling new pressure to perform. Recovering trust and improving morale requires broader levels of collaboration and support. Leaders and staff who know how to draw others in and work through the issues at hand are critical to moving everyone forward faster.

A Diversified Skill Set Major downsizings call out broader skill sets and collateral abilities that may not have been needed in the old environment. Utility players, who can fill the gaps, are critical in the new organization because they take on added responsibilities or they step easily into newly created roles. Be sure to retain employees who bring a breadth of skill from either their current or past positions.

Sound Judgment Some key employees do not appear, on the surface, to be high-impact people, but over time win the respect of colleagues and subordinates for the quiet leadership and sound judgment they provide. There will be a need to anchor key positions and work groups with these stabilizers. As you consider pockets of inexperience or areas of tension that will remain after the downsizing, consider who might be retained to bring a calming influence in the midst of accelerated change.

A blend of these strengths will be critical to advancing service, containing costs and retaining key talent in the aftermath of a major layoff. Your commitment to assist leaders and managers in retaining the right talent must be given equal weight to your involvement in ensuring fair treatment for all who are losing their positions.

Jeff Trautman is vice president/general manager of OI Partners-The Brighton Group (Bellevue, WA). He can be reached at 425-451-3929 or jtrautman@oipartners.net