If You Are Going to Downsize

If you decide to downsize, a few suggestions.... Too many companies simply choose a percentage (across the board) of their labor force that they are going to let go without really thinking through the process, ending up with an overworked staff, "holes" that others have to be filled, an inability to adequately service current customers (thereby, aggravating the very people on whom your business depends), losing talent that you need, etc.

A more reasonable and equally cost-effective approach is, first, to review your customer base to see who are the most profitable both currently and potentially, categorize them in terms that reflect how you sell to them (e.g., long-term relationship building, phone call-ins, through reps, etc.) and then determine the contribution departments make in servicing each group.

Second, analyze the process which the departments utilize in servicing each of your customer groups. This is where a great deal of overlap and redundancy are to be found, as well as processes that can be automated. In reducing redundancy and automating what now may require several people to achieve, the savings will surprise you. (Even if automating may require capital expenditures, a cost-benefit analysis can ease your mind and show a handsome ROI in a brief period of time.)

Third, both the first and second steps should involve as many employees as feasibly possible. Too often downsizing decisions are made by top management who really are not on the floor where the action occurs. The objection to this approach is that people will not "fire" themselves. The fact of the matter is that, when carefully managed by managers, the downsizing that is done is viewed as reasonable and needed. Further, this approach conveys to all staff, those who leave and those who remain, that management is not the "bad guy", but rather is conducting business in a fair way.

When this approach is utilized, the whole downsizing process is seen as more humane, as well as equaling the cost savings that a flat percentage can effect.

Bernard Liebowitz, PhD CMC