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Downsizing in Corporate America

Updated on July 13, 2015

Smart Downsizing

Every time I look around, I am hearing in the news about some company that is downsizing and going through a re-organization in their company. Though downsizing may sound like a great idea, more often than not, it is not the answer needed to recoup or recover costs.

Years ago, I was asked to come to my boss office because he desired to talk to me about an important issue. When I got to my boss’s office, I found that he was accompanied by an outside consultant who was hired to devise ways to reduce the cost in our department. I had already been on the receiving end of the consultant’s decision making process because a week prior, my complete graphic unit was eliminated. I re- bounded by interviewing for the Director of Administration position and I got the job.

However, on this day, I was told that money was needed from one of the groups that I was responsible for. I offered $300K from my department budget but my boss scoffed at me and responded by saying, “We need $1 million and Jean, the consultant will show you how to get it.” I couldn’t believe it. I was prepared to work with directs reports in all my units to reduce cost but now I was being told what to do.

I went back to my office and thought about my boss’s request for a while and then I phoned one of my direct reports for the printing department and requested that he come over to talk with me. I laid the cards on the table. I told Don that I had been chartered with eliminating the entire printing department. However, I added that I have another idea. I told Ralph that I knew where the cuts should occur but since he was closest to the work, I felt that he would have a better idea where the inefficiencies were in the printing department. We both believed that there were many opportunities to streamline the processes and save the unit.

That evening Don phoned me and asked if he could bring over the analyst for the department and I responded, "yes." They both believed that we could achieve the cost savings without the cuts that had been recommended by my boss.

Working together, we came up with a plan that ultimately reduced the cost of operation by $1.2 million. The plan consisted of streamlining processes, renegotiating expensive maintenance contracts to the betterment of the company, getting rid of outdated equipment, purchasing more efficient equipment with excellent payback and ceased automatic back-fills of union positions. We felt our plan would be the best option for the department and company. Our plan also called for putting the best people in lead positions rather than going by seniority and eliminating positions through attrition; i.e., we did not automatically fill vacant positions.

Because this was a union shop, I had lunch with the Union Rep so that she could understand the ramification of not going along with our plan. Then I worked with our Human Resource Rep to ensure that I could get their support when I met with my boss. When I showed my boss our plan, his first comment was, your plan doesn't get rid of people. My answer was no but you get the same financial results and there was no way he could argue with that. In fact, our plan resulted in $200K more than what was being requested.

Because of our plan, I would be given responsibility for many units and worked with my teams to develop Win Strategies for each unit. We led the department in results and cost savings because the plans for each unit were shared with respective employees in each unit. We needed the team’ buy in to obtain the results we desired because they were the ones closest to the work.

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