“Bring me your plans on Monday morning for a 10% reduction of cost in your function”.
For many 2009 was the year of cutting costs. For most it was the year of skimming costs.
From a practical external perspective this skimming makes little sense. From an empathetic perspective it does, but empathy must always be balanced against profit in business. Unless you, as the executive making the decision, thinks your whole organization is 10% (pick your number) heavy it seems taking away resources everywhere will not only reduce productivity but drag down moral at the same time.
Most projects, programs and initiatives are chronically underfunded. Taking “insert your number” away will effectively stop their progress. If the progress of projects will be stopped then there is an opportunity to triage all and find one, or more, with the same dollar spend as you need for savings, that can be officially stopped or delayed. I have seen many programs chopped from the tree, but it is usually out of frustration and significant and expensive stall. in that area.
What I haven’t seen is a clean process of eliminating something.
If that were to happen what are the change management implications?
Fear
Moral
Stakeholder energy account
Potential re-vamp of visioning and corporate strategy
Fear- Was already present. Elimination is not going to create more of a fear response than reduction. One is quick and gone the other slow and insidious.
Morale- If 2009 is the measure, probably already present. Morale is something that always has to be addressed with change that has a backward end state (reduction, elimination, being acquired, lay-offs etc). Same as fear fast or slow.
Stakeholder energy account- There is an invisible account for your organization that holds the energy for change. Past failure (even if only perceived), broken promises, forced change and more all withdraw from the account. Transparency, smart decisions well communicated, empathetic leadership, well guided change processes add deposits. Again quick fast withdrawal for elimination but if done with an empathetic, practical change process a temporary setback. Reduction across the board is like inflation to the energy account. From day to day the asset is, invisibly, worth less and less.
Vision and strategy revamp- You would be in the process of formulating that already unless a reduction announcement is knee jerk. Then you have trust problems and competency issues- as perceived by stakeholders – which is the worst implication for change.
So while reduction may feel safer and look a little cleaner on paper from a change perspective it is the greater of two evils when compared to elimination.