Plan closure ceremonies for the two plants. These places have been a home and a world to many people. They need a way to disengage themselves from that world. Some organizations hold funerals, some hold wakes, and some create unique ceremonies of closure. The details of what is done are far less important than the fact that representatives of the affected groups themselves do the planning and implementation. It has to be their event. The planning takes a great deal of time and is itself a therapeutic process. Start right away.
Institute a program of rewards for cost-saving suggestions from employees. What is happening at Apex is much more than simple cost cutting, but saving money is an important part of the solution to the company’s problems. Soliciting suggestions from employees is an important action. Not only does it draw on an often-untapped expertise, but it also challenges people to be conscious of the costs of what they do. Employees will be engaged in the search for a solution rather than simply forced to accept solutions. (Consider giving them a slice of the savings; if they’re sharing the pain, they ought to share the gain.)
Find ways to “normalize” the neutral zone and to redefine it in terms that benefit both the organization and its employees. Take care of endings first, of course, but begin thinking about what is sure to be a long time in the wilderness. The journey from what Apex used to be to what Apex needs to become is going to last for several years. Like any confusing and ill-defined time, people are likely to project their fears onto it. You need to help them understand why they are so uncomfortable during this time. You must find a more meaningful metaphor for it. Remember the “sinking ship” versus the “ship’s last voyage.” The latter gave people a context in which they could help themselves and the organization. The former, which simply expressed everyone’s fears, did not.
Use the time the company spends in the neutral zone to redesign the whole business: strategy, employment, policies, and structure. This is the opportunity that is embedded in the dangerous situation in which Apex now finds itself. This is the chance—and in today’s situation, probably the last chance Apex will get—to transform the company from yesterday’s industry leader and today’s critical case into tomorrow’s comeback champion. Everyone’s attention has been caught. The debates over the need to change have been decided. This is the time to seize the initiative and convert a necessary reorganization into a complete revitalization. This effort will take a long time, and it must be begun immediately. Only out of such a complete redesign effort can a convincing new picture of the organization emerge. Without such a picture, you’re just pushing players around on the board with no strategy and no clear plan.
Category 3: Yes and no. Depends on how it’s done.
Order an across-the-board 20 percent budget cut throughout the company. That’s a huge cut, and if you simply order that it be made, the results are likely to be disastrous. A totally redesigned organization might well be able to turn out its present output or more for one-fifth less money. But you cannot take the old organization, lop off one-fifth of its resources, and tell it to keep on turning out the widgets at the old rate. Still, as a target figure, 20 percent is important. The divisions can use it as a guideline to generate savings of, say, 10 percent. The remaining 10 percent will probably have to come from discontinuing unproductive operations or having costly support services provided by outside vendors.
Get the executive team to agree to a one-year 20 percent cut in their own salaries. This has more merit. It is the kind of step that seizes people’s imaginations and sends a clear message that the leadership is serious. The trouble is that if it is done by fiat, it generates hostility from the very people who have to lead the new charge on the opposition. So an executive pay cut can’t be imposed. Senior managers must be made to understand the problem and the need for a powerful attention-getting symbolic action. They may need new evidence that what people believe to be their unfairly high pay is undermining their credibility. The problem is that there may be no one within the group who will champion this message. Everyone’s immediate self-interest may get in the way of their long-term self-interest, which is to revitalize the company. This is one of the many areas in which outsiders may be useful.
Plan some all-hands social events—picnics, outings, and dinners—in each company location. In the neutral zone such events can help to protect or rebuild the solidarity that has been damaged by losses and the confusion people feel. But these events have to be timed effectively. Done at the wrong time, they take on a “bread and circuses” quality, like the giveaways and spectaculars that the late Roman emperors used to keep their restless subjects distracted and quiet. So deal with endings first, then consider such events.
Make a video in which the CEO gives a fiery “We gotta get lean and mean” speech. Several things about this idea are wrong. First, the CEO hasn’t yet done anything to restore his credibility—such as leveling with people or taking a 20 percent pay cut. Second, this isn’t a time for organizational weight loss; instead, the whole organization needs to be redesigned. Third, “lean and mean” is a cliché that has lost much of its power to move people. To the extent that tightening and trimming are the answers, the need for them has to be communicated in a fresh and believable way.
Set up a “downsizing suggestion plan” through which everyone can have input into how the downsizing will be carried out. We’ve already established that employee suggestions have many benefits and ought to be solicited—particularly on how to save money in the everyday conduct of business. There will also be a time for employee input into the redesign process. But to throw something as difficult and painful as layoffs open to “employee suggestions” is to court disaster. One way to involve employees in the process is to set up an employee group to advise management on selection criteria for deciding who should be terminated. The process may be no better than the one management would come up with itself, but involvement leads to buy-in. And management doesn’t need any more processes that employees refuse to buy into.
Fire the CEO. This has appeal. The guy sounds like a jerk. Maybe he lacks the wherewithal to get people through the next few years. But watch out. Companies often get the leadership they deserve, and to punish the leader for failures that were the product of many minds is just scapegoating. It’s unfair, and it doesn’t do any good. It may even strengthen the refusal of the CEO’s loyal troops (and there may be many of them) to go along with whatever redesign effort is undertaken by a new leader. Beyond these considerations, a change in leadership at this time will bring a whole new army of changes into the field. Be sure that the gains exceed the costs. All this said, it is unlikely that this CEO will last more than a couple of years regardless of what you do. He is too tarred with the brush of failure to be able to lead a revitalized organization.
Category 4: Not very important. May even be a waste of effort.
Launch a plan to buy the smallest of Apex’s domestic competitors to gain market share and a strong research and development group. At crisis points organizations sometimes turn outward to solve what are really internal problems. It’s like the married couple that decides to have a new baby to save their marriage. The results are likely to be disastrous—not only because the solution doesn’t solve anything, but also because the solution further burdens an already overburdened system. Yet the impulse to acquire what the company does not have is not all wrong. If it were part of the larger redesign, it might be a great move. But now it’s not, so forget it.
Reorganize the executive team and redefine the CEO’s job as a “team coordinator.” Again, the impulse may have some merit. Apex is an old-line company, and its governance system is probably outmoded. (Certainly it hasn’t been making wise decisions lately.) If the redesign we have been discussing created a different kind of structure that demanded a different kind of governance, and if a more egalitarian culture emphasizing teamwork proved to characterize the new organization, then a leadership team run by a coordinator-CEO would make sense. But those are big “ifs.” As an
isolated change, it will more likely just deepen the mess everyone is in.
Put all managers through quality-improvement training. Quality may indeed be an area in which Apex is losing ground to its competitors. But a quality improvement program is a major undertaking, one that generates a whole field of individual and group transitions. To overlay that on the reorganization that is now under way is asking for trouble. At a later point, when the picture is clearer, quality improvement may prove to be a critical piece of the outcome Apex is seeking. Until then, it’s a 500-pound sack that you’re going to load onto the back of an already overloaded camel.
Redo the compensation structure to reward compliance with the new system. Maybe this too will prove to be a good idea somewhere down the line, after the Four P’s are clearer. But for now, no new roles, attitudes, or behavior can be said unequivocally to deserve special reward. (The one exception is the bonus that should be paid for valuable suggestions.)
Category 5: No! Don’t do this.
Cancel the memo and don’t distribute any communications until firm plans have been made for the details of the layoffs and plant closures. This is guaranteed to turn confusion into total chaos. People know that something big is up. A pirated version of the CEO’s unfortunate memo is likely to be instantly shared on social media. The admins and support staff had the news before the VPs, so don’t think that you can postpone this story. Instead, move forward with all the speed you can. Tell people what is afoot, and then tell them when they can expect to hear the next installment. If that deadline proves unworkable, tell them why and then tell them when they can expect the next communication. Don’t let communications cease. People abhor a communications vacuum. Besides, the business press is already at work on a story that will tell people more than you were planning to. So seize the communications initiative. Start talking.
Allay fears by assuring workers that the two plant closures are the only big changes that will take place. You can’t say this! It’s almost certain to be untrue. It will be perceived as one more of management’s lies and another good reason “not to believe a damned thing they say.” It’s far better to say that these are the only changes that have been decided on at present but that further changes will undoubtedly have to be made and that people will learn of them as soon as they have been decided on.
Immediately set new, higher production targets for the next quarter so that people have something clear to shoot for and, by aiming high, adequate output will be ensured even if they fail to reach the goals. These tactics are getting worse and worse. It’s almost certain that output is going to fall, at least temporarily. When that happens, people who already feel inadequate will have evidence that their feelings are right. Far better to set lower targets and exceed them than to achieve slightly higher productivity and a lasting sense of failure.
Circulate an upbeat news release saying that this plan has been in the works for two years, that it isn’t a sign of weakness, that its payoff will occur within a year, and so on. In all communications, accentuate the positive. “Be positive!” is one of those dangerous half-truths that are constantly snagging us on the false half. It’s important for people to be led by others who believe and say, “We can make it,” but it’s very dangerous to leave the impression that the path will be easy or that the outcome is certain. Far too much positiveness consists in leaving that impression. Realism is increasingly important, as people get further into the redesign process. By that time they can see what they’re up against. And “positive thinking” is likely to sound more and more like “wishful thinking.”
Give everyone at Apex a “We’re Number One!” T-shirt. Apex can barely stay afloat! Somebody has been watching too many basketball playoff games. This is the worst kind of positive thinking—not to mention being irrelevant. Not a good combination. Mottos are useful, but only when they effectively capture a real emerging possibility. When they are just words, they simply reinforce what is probably already too prevalent an opinion: this company is being led by a bunch of jerks!
Well, how did you do? Better than in Chapter 2, I bet. In categorizing these options, I found myself debating which rating to give several of them, and if I did it again, I might do it differently. The idea is not to put all the items in the same categories that I did, but to make decisions with people in mind.
Whatever plans the leadership at Apex (or you yourself) come up with are going to represent changes in the world that people have known. Such changes create transitions, and transitions have to take place if the changes are to work. The odds of transitions actually taking place as planned will rise greatly if you make your decisions with the basic transition management tactics in mind.
CHAPTER
9
A great war leaves a country with three armies: an army of cripples, an army of mourners, and an army of thieves.
—GERMAN PROVERB
Conclusion
This proverb comes from centuries of experience with the traumatic changes that accompany conquest, and it deserves at least a footnote in any organizational plan for strategic change. It reminds us that whatever positive results the conquerors gain by their efforts, they leave behind three serious problems: those who have been wounded by the changes they have been through; those who are grieving over all that they have lost in the change; and those whose loyalty and ethics have been so compromised by their experience that they turn hostile, self-centered, and subversive. To make matters worse, in the struggles surrounding organizational change, these “three armies” are found on the winning side as well as on the losing side.
The problem of survivors is seldom on the minds of the planners of change, but it cannot be avoided by anyone who must implement the change or by the people who must manage the situation that results from it. One executive vice president acknowledged that they didn’t realize that the survivors would need as much help as those who were leaving. They were focusing most of their efforts on those departing, and they recognized that professional help was needed to rebuild the teams and relationships that were disturbed by the layoffs. Organizations must recognize the importance of supporting the employees they are retaining and whose loyalty and commitment they need. The leaders who are considering a reorganization or a staff cutback of significant scope should include this in their planning.
The leavers have adjusted better than the stayers.
—EXXON VICE PRESIDENT, DESCRIBING THE AFTERMATH OF THE COMPANY’S DOWNSIZING
One of the ironies of today’s organizational world is that the relentless focus on trimming the organizational waistline is justified in the name of organizational health. Having made these cuts, organizations discover that the only sustainable source of cost savings is a greater and more efficient effort by their employees. Unfortunately, those employees are the same “survivors” referred to in the German proverb—employees whose energy has been sapped and whose commitment has been weakened by unmanaged or mismanaged transition.
Today’s organizations are reeling from the human impacts of the changes that have been forced on them by new technology, global competition, new regulations, and changing demographics. What is the prescription for this condition? More change. The organization tries another change—and then another—in rapid succession. But today we’re increasingly faced with the fact that the current problem is change itself.
This is why transition management is such a critical skill for you to develop. You’re going to find yourself dealing with the aftermath of mismanaged or unmanaged transition every time you turn around. That aftermath is a manager’s nightmare. To remind ourselves of its characteristics, we use the acronym GRASS:
Guilt. Managers (including you) feel guilty that they have had to terminate, transfer, and demote people. Workers who survived feel guilty too. Guilt lowers self-esteem, morale and the ability to engage.
Resentment. Everyone, manager and managed alike, feels angry at the organization for the pain that transition causes. This is natural. But when that aspec
t of the grieving process is not managed sensitively, the anger deepens and lengthens. When yesterday’s changes leave a legacy of resentment, today’s changes are undermined even before they are launched. In addition, resentment can lead to sabotage and the subtler forms of payback that organizations experience today.
Anxiety. People who are trying to hold on to the past while pieces of it are being cut away are anxious. The strange thing is that some managers believe that anxiety improves performance. Perhaps a little bit of anxiety does that, but in the quantity that is common in organizations today, anxiety reduces energy, lowers motivation, and makes people unwilling to take the risk of trying new things.
The winners of tomorrow will deal proactively with chaos, will look at the chaos per se as the source of market advantage, not as a problem to be got around.
—TOM PETERS, AMERICAN WRITER
Self-absorption. Anxious people become preoccupied with their own situations and lose their concern for fellow workers or customers. In a game of musical chairs, the only real questions are, “When is the music going to stop?” and “Will there be a chair left for me?” Larger issues of teamwork, good service, and high quality get lost. Inspirational pep talks on the values of teamwork, good service, and high quality don’t do much good when people are self-absorbed.
Stress. We’ve already talked about the increase in the rate of illness and accident when people are in transition. Most organizations respond with stress management programs. These programs are certainly better than nothing, but they do little to counter the sources of stress.
GRASS: Guilt, Resentment, Anxiety, Self-absorption, and Stress. These are the five real and measurable costs of not managing transition effectively. Remember them the next time people tell you there isn’t time to worry about the reactions of your employees to the latest plan for change. And help such people to see that not managing transition is really a shortcut that costs much more than it saves. For it leaves behind an exhausted and demoralized workforce at the very time when everyone agrees that the only way to be successful is to get more effort and more creativity out of the organization’s employees.
Managing Transitions Page 16
