The CHRO of a client once told me that her biggest concern after a reorganization wasn’t in the design itself but that the organization had to change its way of working afterwards. We had developed an elegant operating model, achieved targeted cost savings, secured alignment across the senior executive team, supported the announcement with a global roadshow, and analyzed pulse survey responses. It was a textbook reorganization that checked all the boxes, but I often wonder if the people in the organization truly changed how they worked at the ground level as the CHRO had alluded to or if the work just stayed the same with different reporting lines.
Reorganizations – particularly those that require reductions in force – are necessary, but highly disruptive. Many people experience them multiple times during their careers, and these experiences can leave scars that last for years. The change itself creates stress for individuals leading to a threefold increase in negative feelings towards colleagues.1 Nearly three times as many workers also express distrust of leadership and a belief that there are ulterior motives underlying the announcement.1 And in the rush to achieve short-term cost controls, more than half of companies report a reduction in long-term productivity.2 We have all seen this movie before – after the initial rush of communication and individual farewells, the rest of the organization is left confused and disengaged.
There is a better alternative. Business leaders need to adopt a new paradigm. In order to change the trajectory of their business and organization, their focus should no longer be on reduction in force, but on revitalization in force. The process starts long before the announcement day and extends beyond the time that impacted employees have changed roles or left the organization.
We recommend four distinct steps for leaders to follow.
Organizations who rewire work from the ground up increase the success of their transformation by 30% or more through increased efficiency and increased effectiveness.3
1. Prepare your leaders for announcement day and beyond. Develop a message that is future-focused and will resonate with employees at all levels. Certainly, an artful balance of clear messaging, empathy and vision is needed to support tough moments, though what is even more important is the ability to lead the organization through change long after announcement day. For months and years after the initial change, the most successful leaders maintain resolve around principles and behaviors to prevent backsliding.
2. Leverage the signaling value of talent selection. What talent is chosen to stay or leave during a reduction in force is an indicator of what the organization values. I once worked with an organization with a large international footprint that had selected an executive team that was highly qualified but all from the U.S. They had inadvertently signaled that global talent was not valued. Often talent decisions are made quickly and based off heuristics and perceptions. Define the role first, then leverage data-driven assessments to find the best fit for that role. Consider also how selected talent will be perceived for the organization’s ability to recognize potential, invest in diversity, leverage experience and other lenses that are important to drive the business.
3. Always treat employees who are asked to leave with respect. Not only is it the right thing to do, but everyone is watching and thinking “that could be me next.” Always communicate tough messages with empathy in an individual setting to impacted employees in advance of telling others. Ensure they hear that the work they have done is valued and will be maintained with a transition plan. Be sensitive to how communication is handled to peers and colleagues. Conduct an exit interview to understand their point of view and potentially pave the way back into the organization in the future. Help them chart a path for their future careers, whether it is in another role in the broader organization or through outplacement. Encourage them to leverage available resources to support their futures. The self-discovery, career coaching and networking tools provided through outplacement help displaced talent find roles that are often a better fit for them than the ones that they left.
4. Invest in the people who will drive the business forward. Too often, organizations are so focused on the up-front parts of change, that they lose sight of the most important part of the future – the people who remain. These workers are often asked to not only cover their existing workload but also the work of those who are no longer in the organization. Interfaces with other functions may have been disrupted with no new plan for who to work with. Managers might have different structures and team members than they did in the past. Too often, business leaders assume that everything will just work itself out, but this leads to disappointment, low morale and protective behaviors that ultimately hurt the business in the long run.
Organizations should focus on three ways to invest in their people after a reduction in force:
Support the individual. Every person will interpret a change in different ways. Their history and context will color how they see the present and future. Help them pivot from lamenting the loss of the past to embracing the possibilities of the future. Show them how the organization is making tangible changes that will impact their day-to-day work in a more positive way.
Drive team alignment. Resourcing challenges often emerge from organizational change. It is up to the teams to evaluate what work needs to continue, change and most importantly, stop. Successful leaders engage the team to redefine what needs to be done, ensure they understand who does what work, articulate where they need to collaborate with other teams, and establish ways for them to support each other when challenges arise.
Reorient towards the future with career conversations. While discussing career growth and pathways may be the last thing on the minds of leaders during a reduction in force, it is one of the most powerful tools for retention and engagement for the individuals who remain. These conversations not only build confidence that they are valued in the near term, but also help individuals see a path forward that they can authentically look forward to.
With change comes opportunity. Revitalize your workforce by helping your people achieve the clarity needed to drive the business onward.