In today’s economy many leaders are faced with having to cut budgets to adjust to market conditions and remain profitable. For most organizations this means reducing staff numbers, which means as leaders we need to let people go. Whether we call it reorganization, reduction in force or staffing cuts, firing people is one of the least pleasant things a leader has to deal with. If that weren’t enough, we’re challenged with growing the business with fewer resources.
How do we respond to the challenge of letting people go while continuing to build the business?
Here are three elements our clients have reported make the difference between a significant drop in performance and morale, and building momentum during a downturn.
1. Be straight
Let people know what is happening. While there may be some things you can’t say, let them know what you can let them know, and be up front about what you aren’t able to say. If you will be able to add more information later, let them know by when.
Give them the straight story. It’s better to be direct with the bad news rather than try and make it nice. People know when there’s a mud pie under the icing you may try to put on top of it. If you make a promise of by when you will give an update – keep it, or at least give a new promise of when you will be able to update them.
As a note, this is about being straight about the condition of the company. Don’t “be straight” about how bad you feel about things and the impact on you – keep this to yourself and/or to a close confidante. People want to know you are focused on the future.
2. Create a future for the organization and for the people
It’s easy in a downturn to hunker down and focus on survival. Yes, survival is important. However, if that’s the only thing you’re focused on, it creates an environment in the organization that will limit performance. People’s actions and disposition are consistent with the future they see. It’s important to create for and with people, the future for the company so that they are inspired. For the people who will be leaving, do what you can to support them in creating a future for themselves. Additionally, if you keep the focus on the future you will likely see investments that can be made and are critical for the future, even in the face of the downturn.
3. Communicate, communicate, communicate (listen, listen, listen)
During this time, it’s important that people hear from you regularly. This can take the form of broadcast messages, town halls, team meetings and one-on-one conversations. The main point is that people experience having a leader who is leading the organization into a compelling future that they feel connected.
The other key aspect is that people have the experience of being listened to. Facing such challenges can be difficult for everyone. When people have the experience of being fully heard, they are uplifted and find it easier to deal with the difficult circumstances.
As you might expect, these three things alone will not give you all you need to deal with when facing staffing cuts. But according to our clients they’re the most impactful.
One of our clients exemplified this during a difficult period for his organization - a significant reduction in staff was required in order to return to profitability. He had the difficult conversations with people letting them know the reality of the situation. He then engaged a cross-section of the organization to participate in developing a new future for the organization; one of the effects of the diverse involvement was that people throughout the organization felt that their views were represented in creating the way forward. People whose position was being terminated were supported in creating a future for themselves and finding other employment - 95% found other employment before their tenure with the organization was complete. During the course of this change, the leader of the organization and his team kept people informed and did a lot of listening. Within a year of beginning the turnaround, the organization had returned to profitability, all other performance measures improved significantly and the workforce was engaged in creating the way forward.
What has your experience been? In what ways have you implemented these three factors? What else have you found works when facing a downturn?