Understanding ‘right-sizing’

I work for a company that has a number of business units, and in the last few months, a number of the teams have been downsized, and yet we have had little communication about what is going on. This has been very stressful, and I have lost friends during this activity. I want to know how management makes these decisions so I can mentally prepare myself.

Thomas

Hello Thomas, what is happening at your organisation is a common phenomenon in today’s world of work. The combination of Covid, the changes in the economic landscape, how business works, and, critically, how customers/clients purchase goods and services have changed.

It’s unfortunate that the communication process has not been ideal. That said, I suspect there are many moving parts involved, and I am sure they have tried to do right in terms of managing the transition.

The decision to downsize the business has likely come from the board, and the bottom line is exactly that, the bottom line of the business, profitability.

As you may be aware, it only makes sense to keep a business running if it’s making a profit and making money. In addition to many other factors, a business must make money. In this regard, if your organisation has what we call business units, then those units must be making money, i.e. each unit must be able to pay for its operating expenses, including aspects of salary as well as all the inputs for the cost of doing business, including marketing distribution etc.  In an ideal world, when these decisions are being taken, there is a team that has done the number crunching; in addition, the same team, together with HR, will look at the business unit talent (skills and competencies) and, where possible, if it is established that the unit has a unique talent; that talent may be re-deployed elsewhere. While I share this too, it may be difficult, especially when the rest of the business does not have the capacity to “absorb the unique talent”.

The team is likely to have defined criteria that will inform who stays and who goes. In these cases, aspects of performance are also considered, so where there are poor performers whose records have been comprehensibly recorded, then they are likely to be separated from the business.

While this process is stressful for staff, it is also stressful for management because it has an emotional and psychological impact. The HR team will, I have no doubt, try to get a win-win. Still, if that is not possible, they will have to go through a fair process for the selection of termination. It is also essential that any contractual obligations that need to be met are not overlooked; otherwise, there is a risk of litigation, etc.

My comment on the communication process you have experienced is that the leadership team should work as best as possible to ensure it’s not painful. That said, these situations are always painful. It is common practice that when the scenario you have shared happens, staff will automatically start looking for new jobs because they do not want to be “caught up in the adjustment”.  In such situations, I advise you to continue performing well in what has been assigned to you and start looking for an alternative role. It isn’t easy, but you must have a realistic mindset. Good luck

Caroline Mboijana,

Managing Director, The Leadership Team (U)  [email protected]