The Broadway play Chapter Two reminds us that lives are broken into chapters. This is also true about America’s corporate life. We saw the nation go from agriculture to manufacturing in the last hundred or so years closing the chapter on farming and beginning a chapter on mass production. The next chapter for America’s economy has begun, a chapter which sees mid- and large size- corporations continually looking t ways to trim expenses in order to compete in a tough economy. Downsizing first became popular in the late 1980s as companies began to focus on the bottom line. It continued for many years saving a good number of today’s corporations from extinction. However as the economy grew, these downsized companies upsized once again. Like popular fad diets, the weight they had lost was put back on along with some extra pounds.
As we see the downsizing trend occurring again, we must realize it is likely to be more permanent as record numbers of employees see their names on the downsized list. So many individuals are affected that some companies are prospering from this trend.
Properly downsizing can be prosperous to any company, adding to the bottom-line in a very short time frame. But improper downsizing has the potential an unrecoverable nosedive into the wastelands of corporations past. In any downsized company, employees that remain will wonder if they have really survived or if their name in an undeclared wave of layoffs still to come. Leaders find that they have fewer people to do the work, but just as much work needing to be done. Employees wonder why they have more tasks to do and nothing extra in their paycheck. These conditions can add up to disaster that not only affects the downsized company, but also impacting their customers and suppliers.
Following the downsize trend of the late last century teamwork became so popular that it became a way of life across many, if not all, sectors of the supply chains. Each facet of the chain pushed work and analysis further down the chain in such a way that today’s downsizing has a completely different character. This means that at any sales portion of the supply chain (IE: raw goods to assembler) the seller must be willing to team with the customer in order to maintain and grow business. It is not a difficult task to do once one gets beyond on argument that it is not the job of the seller, but it is one that must be diligently researched and developed. Companies that do not get involved in the team will be left in the dugout as their competitors take to the field.
Proper downsizing involves many aspects of gaining employee trust, leadership training, and a review of the organizational structure. It must be coupled with a fresh approach and outlook to the business that states, “This is a new beginning, not an end; this is the time for all levels of employees to become fully committed and connected to our success and future together.”
Thomas Hickok observes that downsizing is only successful when it is accompanied by this form of true culture change. In his essay he points to Xerox and General Electric as proof of this point. Certainly these activities can range from lip- service to formalities, but as Hickok’s examples show, true change must be sought after from the top down. Where there has been a genuine striving to look optimistically at the new opportunity a downsized company has, considering the positive impact to the bottom-line and vibrant opportunity to compete as a leaner, lower cost organization the success rate is staggeringly positive.