Cost Cutting Change

Cost cutting creates a strange stripped change process.

Admittedly, it is luck to have CM built into this kind of initiative. Surprisingly, this is the first place CM is inserted. It is, by far, the toughest scenario for a CM practitioner. Inevitably, the pattern is this- strip the organization to bare bones which means a re org., reduce space which means a move initiative, reduce people as a result of both which means RIF and, likely, create a telecommute/work-at-home program since the organization will have been reduced to a transactional entity.

This is a very common “transformation”.

How does CM deal with all this?

In general many of my recommendations still fit. End state back works- deciding what resources the organization will need really goes down to the individual level here. Gathering expertise early a little less so since the more interaction there is early on the more stakeholders will see they could very well be working to remove their own position. Frequent and timely communication is essential, but it will have a “put a rosy outlook on it” message. Training is crucial. Extra effort should be given to addressing the differences between collocated and non-collocated work and exchange.

The toughest part about this kind of change is that, at the individual level it probably does not “makes sense”. Everything that is important changes for the person. So much so that ties to organizational effectiveness rarely overpower discomfort. I still do not believe that change necessarily takes something away to be replaced by something new (I am in the “move to the new spot” camp). This type of transformation really does takes things away. And it is bound to create a lot of resistance. A great place for old fashioned change management (minus urgency which rarely plays out well).

These environments are typically top down, sometimes molded into a union structure, hourly and come-to-work 9 to 5 environments. Someone who has chosen that environment  likely will not be skipping out of bed to sit alone all day on the phone at home. (I snicker at this thinking of all the cubicle environments I have consulted in- minus the trips to the water cooler it is really the same 75% of the time).

• Communication
• Training
• Culture and the Individual

Communication

Needs to be as transparent as possible. People will be rearranged (possibly out the door) so a lot of thought needs to go into the process of introducing those messages and matching actions that are as empathetic and understanding as possible. It is much better to not hide then to try to be secretive and hope the whole change just fleshes out on its own.

If there is a way to put a positive spin on the change, great do so. But, remember stakeholders do not fool easily. They will figure out the secrets and the effects will stay with those who remain. This is business and things like this happen. The best you can do is communicate with clarity and as much transparency as possible. The best you can hope for is an end state full of people who are happy to be working.

Key pointer here- develop messages that have to do with the skill and capability of stakeholders. If the organizational message does not work the “how you personally make a difference with your work” message might.

Training

This type of initiative usually calls for real training- the kind that develops specific skills, like new key punching. The earlier this training can begin the better. Think of the times in your life when you tried to learn something new, which required clear headed practice, under an emotional grey cloud. Timelines, dates, agendas, needed skills for the end state all need to be messaged clearly.

Culture and the Individual

A cost cutting initiative tends to be linear and chronological (once decisions at the top have been made). The word I think in my head is, Inevitable. Why is that word never used in a positive way? I knew we were going to be rich and happy it was… inevitable.

Where change management practitioners can make a difference, or at least be a salve to the wounds, is in connecting at an individual level and illustrating and highlighting the effects all this will have on culture.That may require some brutal honesty in showing that little of the current culture will survive. There will be a new one though. The change process should do everything it can to demonstrate what that looks like, call out the positives, provide avenues for dialogue about the negatives and be genuinely supportive and empathetic.

Just do not have a process where a stakeholder can say, “I see right through that”. Think of a tinted window. Stand in front of it and you will have no idea what is going on inside. If light shines at just the right angle though all is bared to the observer. Semi transparent change with uncomfortable aspects partially hidden tends to work the same.

Cost cutting initiatives have a lot of CM foundational communication and training. They irreversibly change culture. They tend to leave a wake of negative effect (which starts with the first announcements). They, by necessity (think lay offs) need to have filtered communications so cannot be fully transparent. They are the most difficult type of “transformation”.

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