|
|
article page | 1 | 2 | 3 | 4 |
If not, you may well worry about being downsized in the future. How do you get picked for a RIF or downsizing? One of the authors was once asked to help a friend out: “Please tell my spouse that my termination was not about any fault of mine.” Downsizings are very emotional times for the employees and their families. Speaking from experience, the downsizing of MCI WorldCom, just before and during the first six months of its bankruptcy, was particularly brutal. At your desk one day; on the street the next without any severance pay or health insurance. Groups of displaced employees banded together and sought mutual support. We know such a group of top engineers and strategists – their families suffered and they were rather bitter. By following what happened to them and others we know, we can tell a preliminary story of the results. While not a scientific sample, this forms a basis for our assessment of potential future impacts of downsizing this group.
|
|
"Those most able to get a job elsewhere jump at the opportunity; so the most skilled leave in disproportionate numbers." |
|
2. Avoid targeting specific employees.
If a company fires an individual, the company must have a very strong case that is fully documented to prevent legal action. This has resulted in the “balancing technique” that sutle teams (or HR departments) use for a non-specific reduction. A “business financial” reason is cited as the overall cause for the reduction. Then for the unit affected, a profile of the existing employment population is drawn up: proportion of men to women, whites to minorities, performance evaluation percentile, etc. The group selected for downsizing is balanced to mirror this average picture of the division. Here again, top performers are lost to the company. |
|
|
|
|
|
What this group learned over time was “It is not your fault”. Actually it is seldom about you, as an individual, but it is sometimes about the cumulative choices you have made and the roles you have played in a company. And somewhat counter intuitively (at least for those MADD corporate bus drivers), those who have taken on many different roles and those who have directly influenced the company’s growth often are the first to leave. For example, highly experienced and confident employees are self selecting when a “buy out” offer is made. Those most able to get a job elsewhere jump at the opportunity; so the most skilled leave in disproportionate numbers. Also, those close to retirement accept the offer, so the most experienced leave in disproportionate numbers. But what about those downsized involuntarily? Are these reflective of the general makeup of a company? Are they typically selected from the lowest performing group of employees? The answer is also no. Let’s look at why that is…
In doing so, let us coin a new use for an old term, the sutle. This is our name for the specialists brought in to do the difficult work of trimming spending and workforce. This job is almost never done by the company itself and gets contracted out to companies and groups which specialize in this work. These groups follow two common techniques.
1. Recapture any unspent money by eliminating projects which have unspent allocated capital or large operational budgets.
Ironically, the groups with unspent capital are often the teams with the most drive and creativity - those that proposed the need for, and then successfully fought for, those funds. Frequently these projects represent strategic new directions for the company. The sutle looks for these unspent dollars on a balance sheet and redlines the projects. This is totally non personal and the records of those affected are never even examined. Result: the top teams get released.
|
|
In all these actions, the brain trust of a company is reduced to support immediate current financial realities. Short term gains are made in the eyes of Wall Street, but long-term costs are accrued by the loss of some of the company’s most strategic assets. But it really is “nothing personal”.
“Precautionary Principle…”
What happens to all those telecom experts that are tossed aside? Taking a non-personal approach, let us pursue a macro economic observation of what happens when a planned intervention is thrown into a complex system. We will look at the entire horizon of the telecom industry and its impacts on economies – clearly a complex system. In this section we will see how “good intentions” conceal unintended negative consequences.
The principle of “unintended consequences” has been known since the 18th century and is rooted in Scottish pessimism. One manifestation of this principle is that voiced by Patrick Hutber, an economist and journalist in London. Hutber's law states that "improvement means deterioration". Accepting this pessimism sometimes leads to a rationalization that “counter effects” are beyond control, so “let’s not worry about them.” We suspect that this is often the mental state of executives during and after a downsizing.
Yet the most systematic early exploration of the principle of unintended consequences was undertaken by the great sociologist and philosopher of science, Robert Merton. His functional view sees unintended consequence as a sometimes preventable activity if one understands the system and follows the ‘chain of causes’ that counter the planned intervention, such as:
|
article page | 1 | 2 | 3 | 4 |
|
|
|
