The Manager's Guide to Coping with Downsizing

With global financial markets predicted to remain unsteady through 2009, prudent cost cutting, minimising exposure to volatile exchange rates and investments and more tightly managed cash flow are sound strategies. It’s also a sound strategy for financial, policy and economic experts to learn the lessons why our economies experienced such a severe downturn in a relatively short period of time when less than 12 months ago, the majority of economic experts were predicting record GDP growth rates for 2009/2009.

We are faced with some important choices. Our businesses can respond with hysteria like some in the financial industry, and carve out the fundamental human capital of our businesses in redundancies and reduced personal development. Or we can take the advice of a financial leader like Saul Eslake, Chief Economist of ANZ who advises that cost cutting is still sound, but not in the areas which make up the most fundamental and lasting value of our businesses. While he acknowledges that the peak financial and economic policy decision makers have played a key role in the current economic climate, business does not have to play the same game. In fact, business – especially Australian business – is well positioned to save Australia from moving towards recession by retaining valued employees as much as possible.

As a manager, business downsizing may be affecting you in the next 12 – 18 months, in any one or all of 3 possible scenarios:

• You need to manage your own redundancy
  Find a strong coach, refresh your personal development and prepare for your next appointment
• You notice the great talent that is being released onto the market
  Try hiring when everyone else is firing
• You need to manage redundancies of your employees
  Read the following excerpt from A Climate for Change for effectively managing yourself and your employees during the redundancy conversation

Think of a long-term loyal employee.
Imagine that you have just been advised that the business no longer required their role and that YOU are the one to deliver the news to them tomorrow morning.

What are you feeling?

Acknowledge for a moment the impact that delivering that news can have on you as a leader. Some of you might feel very capable. In truth, many leaders count this task as one of the lowest on the pecking order. What are you experiencing?

• Guilt
• Disbelief
• Disagreement with the decision
• Resentment that you have to deliver the news and it wasn’t your decision
• Dread that you will be hurting someone’s feelings
• Remorse that they may dislike or even hate you
• Feeling physically ill
• Sleeplessness
• Fear of their reactions – will they be calm, happy, hysterical, violent?
• Concern that you won’t be able to handle it

Under all of these emotional layers, there are two sets of principles that will guide this difficult conversation and help you know you have done your job to the best of your ability:

Your responsibility to yourself as a leader

• Ensure you understand the facts
• Fulfill your legal and ethical obligations
• Preserve your responsibility to uphold the organisation’s image
• Minimise the negative impact on the organization and the employee
• Acknowledge your own emotions

Your responsibility to the employee

• Tell the truth concisely and compassionately to the best of your ability
• Check if they have understood
• Enable the employee to retain dignity
• Describe what happens next
• Remind them that empowerment comes through their exercising personal choice

Here are some of my own Do’s and Don’ts for this meeting:

Do

• Arrange the time and date for the meeting
• Make sure the place is private and you won’t be disturbed under any circumstances
• Write down what you need to say
• Deliver your message
• Listen and wait for a response
• Restate the message if necessary
• Manage reactions; understand that their views are true for them
• Keep to the script
• Map out the next step and offer choices
• Ensure you have planned appropriate support for the employee following the meeting

Don’t

• Get distracted by different subjects or small talk
• Defend, argue, or justify
• Discuss other employees
• Use platitudes
• Offer false hope