I do hate it when business use phrases to hide actions in order to reduce the potential impact and effects and one that I find increasingly annoying is “Rightsizing”. This is partly because it’s so often used to replace more accurate descriptions such as Redundancy.

It was used in Management Today “UBS is far from being the only bank which has announced
job cuts recently – everyone from HSBC to Credit Suisse has been busy
‘rightsizing’ their workforces…The job cuts at UBS amount to over 5% of its total workforce “.

Now, I know that “Rightsizing” has been used for some years but surely it’s poor management to have “Wrongsized” in the first place (see Tony Miller descriptions below) but I doubt that it’s the management jobs that are about to be rightsized! You can imagine the  press release from UBS HR was at pains to seem to be “normalizing” the situation but is the term “Rightsizing” the correct one.
 
Thanks to Tony Miller  for giving a reasonable explanation so that we can all make up our own mind!:

Downsizing
Is simply reducing the number of reporting layers in the business to produce a better line of communication and efficiency…Downsizing is a stressful and risky business and should not be carried out by anyone who has not experienced this technique.

Rightsizing
Involves reducing the organisation by a small percentage. By doing this you can keep the organisation trim and in better condition. It can be achieved by a number of painless means such as:
Freezing recruitment
Releasing the long-term sick
Releasing poor performers

Reducing costs is a main focus for all business owners and Director these days. The most obvious cost to tackle are the “people costs” but these also happens to be the most problematical.

The problems
The first problem is that, even in difficult economic times, there’s an inbuilt process in most firms that increases people costs. Once a person is hired increases in pay to keep up with inflation, promotions, increases in employment taxes and so on all add to increased costs. If salaries are frozen or small then there will be increased pressure from staff who claim that they are “Unvalued” and continually justify increased bonuses and promotions. Then there is the hidden future pension costs, often not included in company accounts, but which increase staff cost significantly.

Reducing people costs is an issue that Directors talk to me about almost daily. The problem is that getting rid of staff is often a problem. In some countries it’s almost impossible and even in the UK and the USA the process takes time and substantial management time, which is all cost!

Reducing costs by shedding under-performers
Many Directors and firms find it difficult to reduce staffing levels until forced to do so. Concerns over company morale, culture and team spirit all cause delays in shedding staff. However, the fact is, that often reducing dead wood actually improves the morale of those that remain.

A main flaw
One of the most effective ways to manage staff costs is through a robust performance appraisal system. Yet I’m still surprised at the number of companies that have a poor system of staff appraisal. This is so costly, makes change and restructure difficult. Ideally a good performance review is held every six months, is focussed on targeted results and linked to time-framed development and which actually identifies the best talent as well as the costly talent.

The final stage is to ensure that action is taken to manage the bottom end of the talent pool effectively so that it is continuously pruned.

I’m continually asked by businesses how they can interview and recruit good sales people whilst avoiding the order-taker that eats up valuable management time and resource.
So here’s a video I’ve just uploaded and hope that you find it useful

Hiring salespeople, avoiding ordertakers

News International closing down the News of The World after the various scandals that’s gripped it has probably left a majority of staff wondering what their future is. Even though the majority will be entirely innocent of any wrongdoing there will be the fear that future employers will view with scepticism those that have “The News of The World” on their CV.

There is a future
Assuming that one is innocent of any wrongdoing then there is a future. The thing to consider that in the past there have been many other people who have worked for discredited companies that have gone on to greater career success.

Think of the thousands of innocent staff who worked for BCCI (Bank of Credit and Commerce) who suffered the Banks closure and yet who moved on to find other jobs.

Confusion, anger and a sense of betrayal
Naturally, as with many redundancies, there will be confusion and anger and a sense of betrayal directed at the Directors and management. There is, however, little point in brooding on it. It’s happened. If you’re good at your job and can show a good track record then most future employers will make a judgement on the facts and the earlier one considers the areas of work that will “look good” and include them on the CV the better.

What’s next
Apart from thinking through how to construct the CV it’s worth ensuring that previous connections and maintained with other employees and anyone who can provide a reference. Keep copies of work that can be shown to future employers and make contact with new people as soon as possible and network hard. Most people leave this part far too late!

Maria has held a departmental staff meeting and told her team that she is conscious that Christine (her assistant) is overworked and under pressure and is therefore removing some of her responsibilities. The result is that Christine will undertake fewer new staff interviews and more research. Maria will delegate staff interviews amongst the other team members as people are available. Christine sees this as a removal of a key part of her job and the scope of her work has been reduced.

This afternoon Maria has a meeting with the Sales Director and Project Manager to look at restructuring the remaining areas of the sales force. The meeting will identify those posts and branches in the north of England that The Sales Director wants to merge and reduce the headcount by three managers and five sales administration staff. Maria is being consulted to advise on retaining the people that the Sales Manager wants to retain whilst “letting go” those he sees as being less capable.

Following the strategy paper that Maria and the Sales Director produced a few weeks ago Maria has seen the first team that is being restructured, The Marketing Department.

The post of Marketing Manager and his deputy are seen as being redundant. In future these roles will be done by the Sales Director, who sees himself as an expert on the topic.

This has come as a shock to many people in the company as the Marketing team have been credited with increasing company profile and being instrumental in the development of new product ideas that have kept the company at the forefront of their industry.

The gossip around the coffee machines would suggest that many see this move as the Sales Director “consolidating his position” as opposed to looking forward to the company’s future success.

Maria has been at her new company for a month and seems to have settled in well, although her team have some reservations around issues of trust. They see her as being self-promotional as opposed to a “team advocate”.

Over this last few days Maria has been working with the CEO and Sales Director to look at restructuring teams. With the drop in sales resulting from the depression certain posts are now seen as being redundant. Maria is advising on how this can best be done and a strategy for implementation.

Some sales teams will disappear altogether and some will be merged into others. The first announcements will be made towards the end of next week. The objective is to have the new teams in place for early next year after a staff consultation period.

To prepare the necessary paperwork Maria has chosen to work with two of her more junior team members. Her assistant managers are wondering why this is the case and if there is a “hidden agenda” to Maria’s actions.

A major challenge for business leaders is to maintain organisational productivity. (Formally defined as the ratio of an organisation’s total output to total input, adjusted for inflation, for a specific period of time).

Yet is this challenge made more difficult during a downturn?

One of the inputs in the formula is the workforce but at this time when many companies are laying off their people talent. The question that should be asked is how this affects the productivity of those that remain and can improvements in productivity be sustained under such circumstances?

During the previous downturn I was involved with a company that made a series of redundancies and each time a new redundancy was announced productivity collapsed in other parts of the organisation. This wasn’t to say that people seemed to stop working, on the contrary everyone seemed very busy.

However, productivity continues to fall as people discussed the worsening situation and the company’s Directors buried themselves in their offices stating that they were busy “saving the company”.

Too often business leaders might assume that they are unable to positively affect the situation and that under the circumstances a drop in morale is inevitable. I disagree with this assumption and advise far greater “management visibility” at such times.