Tutorial 5
You are a middle manager helping to implement a new corporate cost-cutting strategy,
and you are meeting skepticism, resistance, and, in some cases, outright hostility from
your subordinates. In what ways might you or the company have been able to avoid
this situation? Where do you go from here?
There always lies a possibility where-in the need to switch to corporate cost cutting
strategy could have been avoided by the company with better monitoring of financials
and accurately capturing performance signal well in advance. Most of the decision in
a company are usually taken at a higher level with little or anything known outside the
inner circle. And employees still are expected to do their jobs: – serving internal and
external clients, taking projects forwards and meeting deadlines without any headsup. However, this is easier said than done in highly uncertain situations. The worse
being there is still not guarantee that the exercise of cost cutting will deliver the
intended result.
With most of the companies rewarding longevity more than competence, there always
is an accumulation of middle managers who become the focus during cost-cutting
activity. They are expected to carry of company’s decision and agenda, often at the
cost of facing burnt from subordinates. This might also hamper the competence and
confidence of managers not trained to handle complex teams and situations.
During planning out the strategy for cost cutting, the manager has to ensure strong
communication on 2 very important points: – 1. Firstly, to make the right sort of promise
to employees- stating cost reductions will just not be fair but also productive. That the
transformation is not aimed at functioning of the company for few more years, but there
exists a concrete long-term plan towards recovery. 2. Secondly, that the upper/middle
management is also accountable during this transformation process and organization
has adopted a holistic process of due diligence at every level of hierarchy and all
verticals in this path of recovery.
The evaluation process and timing are key during such organizational transformation.
Ensuring to stick to evaluation/ appraisal criteria as stated during employee onboarding will be more equitable for the employees in concern. The feeling stirred up
by an announcement of cost –cutting can be very powerful and to enable people see
beyond it will require higher level of social connect and mentoring. As a middle
manager, one has to empower the employees to communicate and lead, and not just
passively watch their departments being trimmed. They must help people to
understand the reasons for the particular choices that were made, and realize that the
company, and by extension most employees, will ultimately be better off as a result. In
so doing, these managers can earn their people’s trust by helping them see that
becoming more efficient and effective is both a path for survival and a better way to
operate. Even though the transformation process can be long and hard, trust and
vision have to be created that as the company comes out as more competitive and
agile, great incentives and growth path will be provided to those whom remain ad prove
their calibre.
The transformation proceeds over three distinct stages, each presenting a different
challenge in com­municating with the workforce. 1.) In the first phase, the direction for
restructuring should be set, prioritizing opportunities that has to be pursued, create
case for change while expressing intent that “this time it will be different”. 2.) Secondly,
to translate strategic decision into detailed design for the future processes,
organization, and systems, and develop a plan for transforming from current to the
future state. 3) In third stage, the detailed design of the transformation becomes the
new normal for the organization and its effectiveness has to be analyzed and duly
highlighted.