Business Reorganizations: First Things First
By Bruce Murray
Layoffs rightfully focus attention on the discharged workers. A trainer’s instinct is to help, but unfortunately, these people are usually on their way out the door before the trainer even hears the news (1). Management typically assumes that the remaining workers are grateful for their jobs, and to protect their own security, they will increase their productivity. The truth is that these workers undergo transitions every bit as significant as those departed (2). Their productivity will fall dramatically, but trainers can play a key role in restoring effectiveness.
William Bridges names three phases in reorganization: abandoning the old, followed by a chaotic period of adjustment he calls “neutral zone,” and finally the “passing on” to whatever the new becomes (3). Typically, executives have wrestled with the downsizing for weeks before putting it into action. By the time the news becomes public, they are anxious to get to the future’s exciting changes. The most often ignored phase is the “letting go of the old,” and it is the key to a quick turnaround (4). We either forget or underestimate the psychological impact of ending an era, but unless we effectively recognize past identity, we seriously jeopardize future success (5).
I learned this lesson when my business partner, Theo Monk, was hired as general manager of a trucking company on the brink of insolvency. Without previous ties to the industry, Theo was familiar with its solid reputation going back to the 1920s, but he was focused on its current weaknesses in crafting a reorganization to save the company. His staff was veteran; many of them spent 20 years dutifully fulfilling management’s direction and working diligently to build the company. As the financial performance deteriorated, for some reason, management kept them in the dark, making Theo’s news of reorganization a shock.
He sensed their hurt and distrust as he reviewed the company’s people and processes. After all, who was he, without any industry experience, to be turning their world upside down? He had a lot of listening and talking ahead of him. Susan Heathfield observes that individuals vary in how they respond to large-scale changes. “Some people need to ‘talk it out.’ Others suffer silently. Some find relief in complaining. Some talk and talk and talk, but are really supportive of the change. Others find ways to sabotage changes and undermine efforts to move forward” (6).The turmoil of change causes people to feel a loss of energy, have difficulty concentrating, and increases their chances of experiencing accidents or interpersonal conflicts. They see themselves as weak for their coping difficulties, and feel survivor guilt when they reflect upon friends and colleagues who lost their jobs (7). In one-on-one meetings, Theo listened and immediately grasped a justifiable pride of their past accomplishments.
As Theo gathered the troops, he would repeat the reasons for the reorganization and pitch his vision for the future. His first project was designed to give the company a fresh look, improve working conditions, and lift morale. He found an energy conservation program with great financing to replace the warehouse’s dim lighting. Under the new light, they would repaint and hang the new logo they helped design. But before anything else, there was important old business to conduct: the celebration of their past accomplishments. Theo set up a display of old photos, awards, and documents that honored their glorious past. He arranged for some of the respected leaders to share some reflections on past battles and stories of achievement. He then awarded some of these veterans with the old logo sign and some obsolete equipment they found in storage. These relics would serve as iconic tributes to those good old days.
It was an emotional ceremony acknowledging and thanking workers’ for their valiant efforts. As the emotional energy wound down, Theo then spoke. He emphasized that the changes largely were dictated by changing external circumstances beyond their control, and not the result of their lack of effort. He admired their loyalty to the company and the respect they showed him. He then listed their strengths and core competencies, noting his confidence that these enduring assets would be the building blocks of the company’s resurgence.
Daniel Pink is an award-winning writer who specializes In employee motivation (8). His research review concludes that workers are motivated by three needs: autonomy, mastery, and purpose. Layoffs and management reorganizations undoubtedly undermine worker autonomy. Heathfield concurs: “People don’t mind change; they mind being changed” (9).When autonomy is compromised, workers blame them: owners, management, and Human Resources. Like HR, trainers have a wellspring of understanding of human emotion and thought-processing, but distressed workers generally consider trainers part of us, not them. Empathetic trainers will be viewed as trusted allies. We can remind cynical and distrustful workers of Wayne Dyer’s pragmatic advice: “You cannot always control what goes on outside. But you can always control what goes on inside” (10).The improved relations have a payoff to trainers because many of these people soon will become students as a result of the new assignments many of them will undertake.
A silver lining to reorganizations is that they lead to new assignments. Training will provide workers with opportunities to learn new skills which, creatively applied, lead to fulfillment of Pink’s second motivator—mastery. It is important for trainers to pay attention and incorporate the creativity of a reorganization into their curricula. It is also important for trainers and management to be open to new ideas. Too often, we tend to be locked in to our own vision. Besides missing out on good ideas, being dismissive of employee suggestions is a morale killer.
Downsizing and reorganizations are painful times. Most managers dwell on the ultimate outcome, or perhaps the unsettling interim period before the changes are fully enacted. Not enough attention is given to the painful sense of loss that occurs with the first announcement of the drastic news. As I learned from Theo, paying an initial tribute to erstwhile contributions can have a lasting impact in shaping the difficult days ahead to reach a successful new identity.
- Cappelli, P. (2009). “Workplace challenges: Managing layoffs, and motivating those left behind.” Wharton Center for Human Resources. Retrieved from knowledge.wharton.upenn.edu/article.cfm?articleid=2389.
- Misimarra, P. (2009). “Workplace challenges: Managing layoffs, and motivating those left behind.” Wharton Center for Human Resources. Retrieved from knowledge.wharton.upenn.edu/article.cfm?articleid=2389
- Bridges, W. (2003). Managing transitions, 2nd ed. Cambridge MA: DeCapo Press. p. 5.
- Ibid, p. 7.
- Sergay, J. (2011). “Work with the walking wounded.” Smart talk. Retrieved December 2011 from sergaygroup.com/Smart-Talk/Handling-Layoffs.html
- Heathfield, S. (n.d.) “Downsizing survivors: Motivating the employees who remain after layoffs.” Retrieved December 2011 from humanresources.about.com/od/layoffsdownsizing/a/downsizing2_3.htm, p. 3.
- Ibid, p. 3.
- Pink, D. (2011). “Drive.” Author’s synopsis of his book, A whole new mind. Retrieved May 2011 from http://www.danpink.com/drive.
- Heathfield, S. (n.d.) “Downsizing survivors: Motivating the employees who remain after layoffs.” Retrieved December 2011 from humanresources.about.com/od/layoffsdownsizing/a/downsizing2_3.htm, p. 3Ibid, p. 3.
- Dyer, W. (n.d.). “Control quotes.” Retrieved December 2011 from brainyquote.com/quotes/keywords/control.html.
Bruce Murray was an executive in manufacturing, logistics, and consulting. The author of four college textbooks, he held Accounting and PHR certifications, and has extensive experience in developing and implementing training programs. Murray is completing his MBA at Marylhurst University and will be teaching business in Portland, OR.